Definition for Closed End Fund |
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Closed End Fund
Closed Ended funds are similar to Mutual Funds (which are typically Open End Funds) in their operations, but differ in how they gather capital. They trade like stocks and have to go through an IPO process to obtain investment capital via investors. They normally have a fixed amount of shares outstanding. Hence, price changes occur due to the supply and demand of the shares as well as the securities that the fund is invested in. An ETF would be an example of a Closed End Fund.
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