Open-end fund refers to the fund whose total share is not fixed and can be purchased or redeemed at the time and place agreed in the fund contract.
What's the difference between them: 1. The duration is different. The duration of closed-end funds is fixed, while open-end funds have no specific duration.
2. Different 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 ways of price formation. 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 according to 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 closed-end funds can be used for long-term investment, while open-end funds emphasize liquidity management, and some funds must be reserved to deal with investors' redemption.
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).