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.