open-end fund

Open-end fund

Used in the context of general equities. Mutual fund that continually creates new shares on demand. Mutual fund shareholders buy the funds at net asset value and may redeem them at any time at the prevailing market prices. Antithesis of closed-end fund.

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Open-End Mutual Fund

A mutual fund in which the number of shares may be increased or decreased depending on the amount of money invested in the company. This means that the fund's capitalization is not fixed and changes upon the demand of shareholders. In other words, an open-end mutual fund issues new stock when people invest in it and buys back old shares when investors want to be rid of them. The latter is referred to as redeeming one's share of the mutual fund. The value of each share is the net portfolio value divided by the number of shares. In the United Kingdom, this investment vehicle is usually called an open-end investment company.

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open-end fund

An investment fund that does not have a finite life, continually accepts new investor capital,and makes new property investments.

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Open-End Fund

What Does Open-End Fund Mean?

A type of mutual fund that does not have restrictions on the amount of shares the fund issues. If demand is high enough, the fund will continue to issue shares no matter how many investors there are. Open-end funds also buy back shares when investors want to sell them. These sales are called redemptions.

Investopedia explains Open-End Fund

The majority of mutual funds are open-end. Continuously selling and buying back fund shares provides investors with a useful and convenient investing vehicle. Sometimes a fund's investment manager(s) may determine that a fund's total assets have become too large to manage effectively for a desired total return. When this happens, the fund may close to new investors and in extreme cases may stop any new investments by existing fund investors.

Related Terms:
• Closed-End Fund
• Exchange-Traded Fund—ETF
• Index Fund
• Mutual Fund
• Net Asset Value—NAV