dual purpose fund

Dual Purpose Fund

A fund created by a closed-ended investment company that offers two classes of stock. Each class offers entitlements to either income or capital appreciation.

Notes:

The two types of stock offered by a dual purpose fund are capital and income. The fund's two kinds of potential cash flows allow individual investors to choose a specific class that is more in line with their investment objectives.

See also: Capital Share, Class, Closed-End Investment, Income Share, Mutual Fund

---

dual purpose fund

A special-purpose, unusual type of closed-end investment company offering two classes of stock in approximately equal amounts. One class, called income shares, is entitled to all the portfolio's income, while the second, called capital shares, is entitled to appreciation in investments in the firm's portfolio. At the time a dual purpose fund is established, a date is set on which the fund will be liquidated. At that time, income shareholders receive preference up to the par value of their shares and capital shareholders receive any excess. Also called dual fund, leveraged investment company.