The so-called closed period of open-end fund refers to a period of time when investors do not accept the application for fund share redemption after the fund successfully raises enough funds to declare the fund contract effective. On the one hand, the closure period is set to facilitate the fund backstage (registration center) to make the best preparation for future subscription and redemption; On the other hand, the fund manager can complete the preliminary investment arrangement according to the situation of the securities market. According to the Measures for the Administration of the Operation of Securities Investment Funds, the closed period of the funds shall not exceed 3 months.
Because it is one of the most basic characteristics of open-end funds that fund shares can be purchased and redeemed at the time and place agreed in the fund contract, it can be said that all open-end funds will be open for purchase and redemption after the closed period. According to different situations, the time of open-end fund subscription and redemption is not the same. For example, most funds tend to open their subscription first and then open their redemption within a specified period of three months. At the same time, during the duration of the fund, in order to protect the interests of investors and ensure the stable development of the fund, the subscription or redemption will be suspended according to different market conditions. For example, Huaxia Market Foundation has suspended subscription business for a long time to ensure the appropriateness of the fund's asset scale, and in order to avoid the influx of arbitrage funds, most money funds will also choose to suspend subscription on the eve of the long holiday.
Now you understand why open-end funds also have closed periods.
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