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.

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 ?
The financial institutions include depository institutions, bank-managed estates and trusts, life insurers, insurance companies other than life insurers, private pensions, open-end mutual funds, closed-end funds, exchange traded funds, and brokers and dealers.
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The fund must also adhere to same SEC regulations that apply to all similarly situated open-end mutual funds," a press release said.
Clough is a Boston-based investment advisory firm, managing approximately 4.1 billion in assets: 1.6 billion in hedge fund and institutional accounts; 2.4 billion in three closed-end funds; and 128 million in an open-end mutual fund.
The company said the increase was due to market appreciation of USD455 million, institutional net inflows of USD103 million, and open-end mutual fund net outflows of USD21 million.
(NYSE: FII) Federated Enhanced Treasury Income Fund (NYSE: FTT) said it has approved the conversion of FTT from a closed-end fund to an open-end mutual fund through a tax-free reorganization of FTT into a newly created open-end mutual fund.
The company said the decrease was due to market depreciation of USD2.2 billion, open-end mutual fund net outflows of USD0.3 billion1 and institutional net outflows of USD0.1 billion.
Fund stockholders also approved a non-binding stockholder proposal requesting that the board of directors consider authorizing a self-tender offer for all outstanding common shares of the fund at or close to net asset value, and if more than 50 percent of the fund's outstanding common shares are tendered, to cancel the tender offer and take the steps necessary to liquidate, merge or convert the fund to an open-end mutual fund. The board plans to consider the results of the vote on the stockholder proposal at a future time.
Non-diversified, open-end mutual funds, INFIX and MLPPX's structure, formed as a Regulated Investment Company (RIC), invest across the capital structure of Master Limited Partnerships (MLPs) and energy infrastructure entities.
As of the September 30, 2018 end of the third quarter, DoubleLine Capital and its related companies managed approximately USD 123 billion in assets across all vehicles, including open-end mutual funds, collective investment trusts, closed-end funds, exchange-traded funds, hedge funds, variable annuities, UCITS and separate accounts.
Furthermore, determination, computation and collection of CGT on redemption of units of open-end mutual funds have also been finalized for the period July 01, 2018 to September 30, 2018.
The new alliance pairs Mercer's broad global institutional manager data and research with Morningstar's independent research and data spanning open-end mutual funds, exchange-traded funds, separately managed accounts, and indexes.