Closed-end Fund
Closed-end funds (or closed-ended funds) are mutual funds with a fixed number of shares (or units). Unlike open-end funds, new shares/units are not created by managers, to meet demand from investors, but the shares can only be purchased (and sold) in the market. This is the original design of mutual fund which pre-dates open-end mutual funds but offers the same actively-managed pooled investments.
Closed-end funds are usually listed on a recognised stock exchange and can be bought and sold on that exchange. The price per share is determined by the market and is usually different from the underlying value or net asset value (NAV) per share of the investments held by the fund. The price is said to be at a discount or premium to the NAV when it is below or above the NAV, respectively.
A premium might be due to the market's confidence in the investment managers' ability to produce above-market returns. A discount might reflect the charges to be deducted from the fund in future by the managers.
In the United States, closed-end funds are referred to under the law as closed-end companies and they form one of four SEC recognized types of investment companies along with mutual funds, exchange-traded funds, and unit investment trusts. Other examples of closed-ended funds are investment trusts in the United Kingdom and listed investment companies in Australia.
Read more about Closed-end Fund: Availability, Distinguishing Features, Initial Offering, Exchange-traded, Discounts and Premiums, Comparison With Open-ended Funds, Examples
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