Definition of Open-end fund:
An open-end fund is a diversified portfolio of pooled investor money that can issue an unlimited number of shares. The fund sponsor sells shares directly to investors and redeems them as well. These shares are priced daily, based on their current net asset value (NAV). Some mutual funds, hedge funds, and exchange-traded funds (ETFs) are types of open-end funds.
These are more common than their counterpart, closed-end funds, and are the bulwark of the investment options in company-sponsored retirement plans, such as a 401(k).
Another name for a mutual fund. An open-end fund is free to add new shares as demand increases and remove shares as demand decreases. The market value of an open-end fund is determined by dividing the total value of the fund by the number of shares and adding any sales fees charged at the time of the purchase. Compare to Closed-End Fund.
How to use Open-end fund in a sentence?
- Open-end shares do not trade on exchanges and are priced at their portfolio's net asset value (NAV) at the end of each day.
- Some mutual funds and exchange-traded funds are both types of open-end funds.
- As a result, open-ended funds have a theoretically unlimited number of potential shares outstanding.
- An open-end fund is an investment vehicle that uses pooled assets, which allows for ongoing new contributions and withdrawals from investors of the pool.
Meaning of Open-end fund & Open-end fund Definition