Closed-end fund is a kind of fund with the opposite nature to open-end fund. Investment funds are divided into open-end funds and closed-end funds according to whether funds can be purchased and redeemed at any time. When the fund sponsors set up the fund, the overall issuance scale of the fund unit has been determined. After the total amount raised by the fund is completed, the fund is established and enters a closed period. During the closed period, the Fund will no longer accept new subscriptions, and investors may not redeem them in advance.

Characteristics of closed-end funds

1. specifies a closed period, and it is not allowed to redeem cash in advance. After the establishment of the fund, it enters a closed period, and investors may not redeem it in advance before the end of the closed period. In other words, there is no redemption of closed-end funds.

2. The issuance scale of closed-end funds is fixed. The total amount of fund units issued by fund units is fixed, and no new fund units will be added after the fund is established.

Cash transfer mode of closed-end funds

Closed-end funds have no redemption channels. If investors want to change, there are two main ways:

1. After the closure period ends, it naturally expires and smoothly transforms. So, for example, the life of this closed-end fund is 10 years, and now it is about to expire, so make an announcement and then suspend the discussion, because the closed-end fund will automatically transform into an open-end fund after its expiration.

2. When the closed-end fund is established, a trading period is stipulated, which is generally about 10 year or 15 year. During this period, closed-end funds can't be redeemed from fund companies at net value, but can only be transferred to each other at market price like stocks in the exchange.