Open-end mutual 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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Faysal Islamic Savings Growth Fund, an open end mutual fund, seeks to provide maximum possible preservation of capital and a reasonable rate of return via investing in Shariah Compliant money market and debt securities having good credit quality rating and liquidity.
The experts stated that the net assets of the open end mutual fund industry reached at approximately Rs.
NYSE share turnover 0.656 0.170 1.110 0.428 NYSE dollar turnover 1.670 0.806 3.857 0.655 NASDAQ share turnover 0.649 0.158 1.037 0.408 NASDAQ dollar turnover 2.104 1.032 5.663 0.879 Commissions per share (x10-5) 3.468 1.245 5.750 1.412 Market value of domestic corporations (x106) 7.278 4.782 17.852 1.821 Standard deviation of daily Dow Jones Industrial Average 97.55 86.37 378.33 12.06 Average quarterly fed funds interest rate (%) 5.629 1.953 9.810 1.340 Household holdings 3742231 2334498 9245400 898614 Private pension fund holdings 1167930 605882 2419248 408196 Open end mutual fund holdings 1164252 1132531 3680226 87869 Non-U.S.
Results for bank managed trusts and estates and those for open end mutual funds may be due to individual use of these institutions as a substitute for direct investing, causing the institutions to mirror longer individual holding periods even though the institutions have lower trading costs and better access to information.
42.10 per unit was announced for JS Islamic Fund, the first shariah compliant open end mutual fund in Pakistan.
Aril Habib Investments Limited (AHIL), a subsidiary of MCB Bank Ltd has declared interim distribution for all unit holders of three of its Open end Mutual Funds namely Pakistan Cash Management Fund (PCF), MCB Cash Management Optimizer (MCB CMOP) and Pakistan Income Enhancement Fund (PIEF).