Open-end mutual fund

(redirected from Open End Fund)
Also found in: Acronyms.

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.

Open-end mutual fund.

Most mutual funds are open-end funds. This means they issue and redeem shares on a continuous basis, and grow or shrink in response to investor demand for their shares.

Open-end mutual funds trade at their net asset value (NAV), and if the fund has a front-end sales charge, that sales charge is added to the NAV to determine the selling price.

NAV is the value of the fund's investments, plus money awaiting investment, minus operating expenses, divided by the number of outstanding shares.

An open-end fund is the opposite of a closed-end fund, which issues shares only once. After selling its initial shares, a closed-end fund is listed on a securities market and trades like stock. The sponsor of the fund is not involved in those transactions.

However, an open-end fund may be closed to new investors at the discretion of the fund management, usually because the fund has grown very large.

References in periodicals archive ?
Going forward we anticipate that our closed end funds will continue to invest in Mills development projects, and we see our relationship with Mills being enhanced through investments with Kan Am Grund's open end funds.
Further, shares of the Columbia open end fund issued under the acquisition can be redeemed and exchanged subject to a redemption fee of 2% for a period of one year after the closing date of the acquisition and the LaSalle Fund's common stock will cease trading as of the same date.
The trustees of non-diversified open end funds declared on Friday for Putnam Global Income Trust class B shares (Nasdaq:PGLBX) and Putnam Global Income Trust class C shares (Quotron symbol pending) distributions of USD0.
This was announced by the Board of Directors of JSIL, at a meeting held in Karachi today, where the financial results for Open End Funds under its management for the financial year ended June 30, 2011, were announced, and the final distribution to the Unit Holders of selected funds was approved.
The HBL Asset Management, a wholly owned subsidiary of Habib Bank Limited, is currently managing four open end funds by the name of HBL Income Fund, HBL Multi Asset Fund, HBL Money Market Fund and HBL Stock Fund.