What are Close-Ended mutual funds?

What are Close-Ended Mutual Funds?

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Close Ended Mutual Funds - Taxationwealth

The category of mutual funds whose unit capital is fixed and are traded on the stock exchange after being issued in the Initial Public Offer (IPO) is considered as close-ended mutual funds

Like open ended funds, these also fall under the care of professional fund managers and hold the status of publicly traded investment companies while the trading is done just like in case of securities being traded on the secondary market. But only the factors of demand and supply govern the close ended mutual funds since these cannot be bought back.

The determination of price of a close ended mutual fund is the part which often develops a confusion among the would be investors. The price is based on the demand and supply as well as the additional factors like the change in assets held in the portfolio. 

Myths and risks associated with close ended-funds

Market Risk
Interest Rate Risk
Liquidity Risk

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