What is the meaning of closed-end funds in 223

There are many types of funds, such as closed-end funds. Many investors usually have little contact with closed-end funds and don't know much about them. So what is closed-end funds? Let's take a look at what a closed-end fund is with Xiaobian!

what is a closed fund

when the fund has raised enough funds and the fund contract takes effect, investors cannot redeem the fund shares for a period of time, which is called the fund closed period. The establishment of the fund closure period, on the one hand, is convenient for the fund backstage to make full preparations for the subscription and redemption, on the other hand, it is convenient for the fund manager to make preliminary arrangements for the raised funds according to the market trend. After the fund closure period is over, investors can redeem the fund, so investors don't need to worry about the fund closure period when investing in the fund. This is a normal operating process.

what is a closed-end fund?

a closed-end fund refers to a securities investment fund whose total issuance amount and issuance period have been determined at the time of establishment, and the total issuance amount is fixed within the specified period after the completion of issuance. Investors of closed-end funds can't redeem the fund shares from the issuer during the fund's existence, and the realization of the fund shares must be listed and traded through the securities exchange. The circulation of fund units shall be listed on the stock exchange.

a closed-end fund belongs to a trust fund, which means that the total amount of approved fund shares is fixed within the term of the fund contract, and the fund shares can be traded on a legally established stock exchange, but the fund amount holder may not apply for redemption. The relationship between open-end fund and closed-end fund: the isomorphism of open-end fund and closed-end fund has become two basic modes of fund operation. Open-end fund refers to an investment fund whose scale is not fixed, but can issue new shares or be redeemed by investors at any time according to market supply and demand.

Closed-end funds refer to investment funds whose fund size has been determined before issuance, and whose fund size remains unchanged after issuance and within the specified period.

Open-end funds are not traded on the market. Generally, they are purchased and redeemed through bank electricity. The fund scale is not fixed. Fund units can sell to investors at any time, and they can also buy back at the request of investors. Closed-end funds are not allowed to accept new shares and offer shares for a period of time until a new round of opening-up. When opening up, you can decide how much you want to offer or invest again, and newcomers can also buy shares at this time. Generally, the opening time is one week and the closing time is one year.

what is a closed-end fund?

Generally speaking, closed-end funds are operations that can no longer be traded after issuance, and the share is fixed, which can neither be increased nor decreased. The total amount and the period of issuance have been determined at the time of establishment. Funds that cannot be traded within the specified period after issuance cannot be purchased by investors after the fund raising is completed, and investors cannot redeem them during the investment period. Closed-end funds have the characteristics of long investment cycle, fixed number of issues and duration.

what's the difference between closed-end funds and open-end funds?

The differences between closed-end funds and open-end funds are mainly manifested in different investment periods, different investment share restrictions, different trading places, different price formation methods and different incentive and restraint mechanisms and investment strategies.

investment duration: usually, closed-end funds have a fixed duration, while open-end funds generally have no fixed duration.

investment share restriction: in a fixed duration, the share of closed-end funds is fixed, while open-end funds can be purchased and redeemed at any time.

in terms of trading places: closed-end funds are traded on the market and can only be traded through the stock exchange, while open-end funds are traded over the counter and can be traded through third-party platform software.

in terms of price formation: the transaction price of closed-end funds is mainly affected by the relationship between supply and demand in the secondary market. The transaction price of open-end funds is based on the net value of fund shares and is not affected by the relationship between market supply and demand.

what is a closed-end fund?

a closed-end fund refers to a securities investment fund whose total issuance amount and issuance period have been determined at the time of establishment, and the total issuance amount remains unchanged within the specified period after the issuance. Investors of closed-end funds can't redeem the fund shares from the issuer during the fund's existence, and the realization of the fund shares must be listed and traded through the securities exchange. The circulation of fund units adopts the method of listing on the stock exchange, and investors must bid on the secondary market through securities brokers when buying and selling fund units in the future.

a closed-end fund belongs to a trust fund, which means that the total amount of approved fund shares is fixed within the term of the fund contract, and the fund shares can be traded on a legally established stock exchange, but the fund amount holder may not apply for redemption. The relationship between open-end fund and closed-end fund: the isomorphism of open-end fund and closed-end fund has become two basic modes of fund operation. Open-end fund refers to an investment fund whose scale is not fixed, but can issue new shares or be redeemed by investors at any time according to market supply and demand.

closed-end funds, as opposed to open-end funds, refer to investment funds whose fund size has been determined before issuance, and whose fund size is fixed after issuance and within the specified period. Open-end funds are not traded on the market, but are generally purchased and redeemed by banks. The scale of funds is not fixed, and fund units can sell them to investors at any time or buy them back at the request of investors. Closed-end funds are not allowed to accept new shares and offer shares for a period of time until a new round of opening up. When opening up, you can decide how much you offer or how much you invest again, and newcomers can also buy shares at this time. Generally, the opening time is one week and the closing time is one year.

Let's take a look at the differences between the two:

1. The duration is different. The duration of closed-end funds is fixed, while open-end funds have no specific duration.

2. Differences in share restrictions. The share of closed-end funds is fixed and may not be increased or decreased without legal approval during the closed-end period. The share of open-end funds is not fixed. Investors can apply for subscription or redemption at any time, and the fund share will increase or decrease accordingly.

3. Different price formation methods. The transaction price of closed-end funds will be affected by the relationship between supply and demand in the secondary market, and the transaction price may be discounted or premium. The price of open-end funds is based on the net value of fund shares and is not affected by the relationship between market supply and demand. The transaction price is determined according to the net asset value of each fund unit.

4. Different trading places. Closed-end funds are listed and traded on the stock exchange, and the trading of closed-end fund shares can only be entrusted to securities companies to trade at the market price on the stock exchange, and the trading is completed among investors. Investors of open-end funds can apply to the fund manager or his sales agent for subscription and redemption at the time and place determined by the fund manager, and the transaction is completed between the investor and the fund manager.

5. Different investment strategies. All the funds of closed-end funds can be used for long-term investment, while open-end funds emphasize liquidity management and must set aside some funds for investors to redeem.

6. The frequency of information disclosure is different. Closed-end funds publish the net asset value of fund units on a weekly basis, and open-end funds publish the net asset value of fund units on a daily basis (working days).