What Is Closed-End Fund?
An investment company that issues a fixed number of shares traded on a secondary market (like stocks) rather than redeemed directly by the fund. Unlike mutual funds, closed-end fund shares can trade at a premium or discount to their net asset value, and investors may buy/sell them through a broker at market prices.
Closed-End Fund across 2 exams
Closed-End Fund appears on the following exams. Each defines it in the context candidates are tested on:
- Series 6
- An investment company that issues a fixed number of shares traded on a secondary market (like stocks) rather than redeemed directly by the fund. Unlike mutual funds, closed-end fund shares can trade at a premium or discount to their net asset value, and investors may buy/sell them through a broker at market prices.
- Series 66
- An investment company that issues a fixed number of shares traded on an exchange like a stock, with prices determined by supply and demand rather than net asset value. Unlike open-end mutual funds, closed-end funds trade at premiums or discounts to NAV, a distinction Series 66 candidates must understand for proper client guidance.