Open-end mutual fund

(redirected from Open-Ended Mutual Funds)

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 ?
During the year, 38 new open-ended mutual funds were launched while 13 funds completed their terms and matured.
Al Hilal Bank currently offers three open-ended mutual funds inclusive of the global sukuk fund.
Al Hilal Bank offers three open-ended mutual funds. The bank's first fund, the GCC Equity Fund, was launched in 2011 and has performed strongly.
Using Newfound Research's proprietary tactical models, the first strategies managed by Newfound Investments will be three open-ended mutual funds called the Virtus Disciplined funds.
The research reveals that the number of open-ended mutual funds (OEMFs), closed-ended funds (CEFs), exchange-traded funds (ETFs) and exchange-traded notes (ETNs) increased to 1,019 products by 2011 from 430 products in 2007.
Traditionally the market leader in Saudi open-ended mutual funds, NCB Capital manages 26 Sharia-compliant and three conventional open-ended mutual funds as well as four closed mutual funds covering regional equity, global equity, money markets and Sukuk, making the company one of the world's largest Sharia-compliant mutual fund managers.
The other 50 per cent is invested into a high-quality portfolio of best-performing open-ended mutual funds.
Like traditional open-ended mutual funds, these bond-based ETFs enable investors to purchase a basket of bonds with one simple transaction.
IFIS has been daily providing investors with data on the performances of thousands of open-ended mutual funds, more commonly known as investment trusts among Japanese investors.
This is not so with open-ended mutual funds. The IRS gives you lots of flexibility in how you calculate your gains and losses, and each method has a different impact on your tax bill.