Compared with open-end funds that can be bought and sold at any time, closed-end funds tend to have higher returns, but in contrast, closed-end funds also have more restrictions. Many investors don't know much about closed-end funds, so what does closed-end funds mean? Can closed-end funds be redeemed in advance? Let's take a look.

What does the closed-end fund in the market mean?

1. closed-ended fund refers to a fund in which the total amount of approved fund shares is fixed within the term of the fund contract, and the fund shares can be traded on the legally established stock exchange, but the fund share holders are not allowed to apply for redemption.

2. The main differences between closed-end funds and open-end funds are: different term, different issuance scale restrictions, different fund share trading methods, different calculation standards of fund share trading price, different announcement time of fund share net asset value, different transaction costs and different investment strategies.

Can investment in closed-end funds be redeemed in advance?

Investors of closed-end funds can't redeem their fund shares from the issuer during the fund's existence, and the realization of fund shares must be listed and traded on the stock exchange. The circulation of fund shares is listed on the stock exchange, and investors must bid on the secondary market through securities brokers in the future.

But the specific situation depends on the transaction contract. Some closed-end funds will allow investors to redeem in advance, but they need to pay a redemption fee. It should be noted that the handling fee for early redemption of closed-end funds is generally high, and it is not recommended to redeem closed-end funds in advance, which will be very uneconomical.