open-end investment company

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Related to Open Ended Investment Companies: ICVC

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

open-end investment company

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
This service is available to clients with a minimum of pounds 30,000 to invest and will enable them to enjoy the benefits of individually tailored portfolios managed, using collective investments such as unit trusts, Open Ended Investment Companies or investment trusts.
As well as abolishing initial and exit charges, Halifax has restructured its whole investment product range, converting all of its existing unit trusts OEIC (open ended investment companies) thus abolishing the bid/offer spread.
Net sales of unit trusts, open ended investment companies, ISAs and PEPs were ahead of January 2000 at pounds 1.8 billion compared with pounds 616.5 million a year earlier with net institutional sales at pounds 747 million the best since November 1999.
Sales of the new Isas and Open Ended Investment Companies - which are gradually replacing unit trusts, almost quadrupled to pounds 27.3 million.