open-end investment company


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Open-End Investment Company

Primarily in the United Kingdom, 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 investment company 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 States, this investment vehicle is usually called an open-end mutual fund.

open-end investment company

Open-end investment company.

An open-end investment company issues and redeems, or buys back, shares in the mutual funds it sponsors on a continuous basis in response to investor demand.

The company pools money it raises by selling shares in a fund and the fund's manager invests in stock, bonds, money market instruments, or a combination of these asset classes to meet the fund's specific objectives.

However, the open-end company may stop selling new shares in a fund if it decides the fund has grown too large to invest additional assets effectively.

In contrast, when a closed-end investment company creates a fund, it issues only a limited number of shares, and those shares trade on the secondary market as shares of stock do.

If you purchase fund shares directly from the open-end investment company, you pay the current net asset value (NAV) per share. You also redeem shares at the NAV that's current at the time you sell. If you buy shares through a broker or other investment professional, you may pay an up-front sales charge, or load, in addition to the NAV.

References in periodicals archive ?
On October 29, 2001, that Fund, a registered open-end investment company managed by Fifth Third Asset Management, Inc.
NYSE: KIF) (the "Fund") announced today that its Annual Meeting of Stockholders (the "Annual Meeting"), previously adjourned from August 2, 2001, was re-convened as scheduled on August 30, 2001 with respect to the proposed conversion of the Fund from a closed-end investment company to an open-end investment company (the "Conversion").
authorized the filing the Fund's registration statement on Form N-1A with the SEC to begin the review process to officially register the Fund as an open-end investment company (a mutual fund).
The Fund's stockholders also approved the following Proposals, each of which will take effect upon the Fund's conversion from a closed-end investment company to an open-end investment company (the "Conversion"): (i) the election of five directors; (ii) approval of a distribution plan pursuant to Rule 12b-1 under the Investment Company Act of 1940; and (iii) approval of an amended investment management agreement between the Fund and the Adviser to make certain changes relating to the Conversion.
BOSTON -- Putnam Investments announced today that the agenda for the next annual meeting of shareholders of Putnam Investment Grade Municipal Trust (NYSE: PGM) will include a vote on whether to convert the closed-end fund to an open-end investment company.
Among the alternatives the Fund may consider during the coming year to enhance shareholder values are converting to an open-end structure, combining with an open-end investment company, initiating a tender offer, or continuing the active share repurchase program.
The High Yield Bond Portfolio is an open-end investment company, which redeems its shares daily.