open-end investment company

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Related to Open-End Investment Companies: Closed End Investment Companies, Unit Investment Trusts

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 ?
(11) Providing administrative services to open-end investment companies ("mutual funds"), in accordance with previous Board decisions (see Mellon Bank Corporation, 79 Federal Reserve Bulletin 626 (1993), and Commerzbank AG, 83 Federal Reserve Bulletin 678 (1997)).
(6) Underwriting and dealing in, to a limited extent, all types of debt and equity securities, except ownership interests in open-end investment companies ("bank-ineligible securities") through Mabon.(3)
An exchange-traded fund of Fidelity Commonwealth Trust, Fidelity NASDAQ Composite Index Tracking Stock may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates.
225.24) to expand the activities of its section 20 subsidiary, PNC Capital Markets, Inc., Pittsburgh, Pennsylvania ("Company"), to include underwriting and dealing in, to a limited extent, all types of debt and equity securities except ownership interests in open-end investment companies. PNC seeks approval for Company to conduct the proposed underwriting and dealing activities worldwide.