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| Closed-End Fund |
A closed-end fund is a publicly traded investment company that raises capital through an initial public offering and then uses the proceeds to invest in a basket of securities. Unlike open-end mutual funds, closed-end funds issue a fixed number of shares and they are not required to redeem those shares at the request of investors. However, some closed-end funds, called interval funds, are different in that they may offer to repurchase shares at specific periods of time.
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Similar to common stocks, closed-end funds usually trade on one of the major U.S. exchanges. However, unlike regular stocks, they represent an interest in a specialized portfolio managed by a group of investment advisors. These managers typically concentrate on a specific industry, country, or sector.
Closed-end funds are subject to SEC registration and are regulated under the Investment Company Act of 1940. Closed-end funds are also subject to the Securities Acts of 1933 and 1934.
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