Closed-End Funds

Fund structure allows for active management of investments that can boost income potential

A Primer

A closed-end fund is a type of mutual fund that issues a fixed number of shares through a single initial public offering (IPO) to raise capital for its investments. Its shares can then be bought and sold on a stock exchange, but unlike open-end funds, closed-end funds have a fixed number of shares outstanding at any given time.


The share price of such a fund is determined on the open market (rather than by its NAV), so it may trade at a premium or discount to its NAV. Closed-end funds are actively managed and aim to generate higher total returns than passive investments, often using leverage. This can lead to higher potential returns but also comes with higher risk.