An open-end(ed) fund is a collective investment scheme which can issue and redeem shares at any time. An investor will generally purchase shares in the fund directly from the fund itself rather than from the existing shareholders. It contrasts with a closed-end fund, which typically issues all the shares it will issue at the outset, with such shares usually being tradeable between investors thereafter.

Open-ended funds are available in most developed countries, though terminology and operating rules vary. U.S. mutual funds, UK unit trusts and OEICs, European SICAVs, hedge funds and exchange-traded funds are all examples of open-ended funds.

The price at which shares in an open-ended fund are issued or can be redeemed will vary in proportion to the net asset value of the fund, and therefore directly reflects the fund's performance.

Contents 1 Fees 2 Active management 3 Net asset value 4 Hedge funds 5 Examples 6 See also

[edit] Fees

There may be a percentage charge levied on purchase or sale of shares—in this case, the fund is a "load fund"; if there are no such charges levied, the fund is "no-load". However, brokerages may charge commissions for the purchase of even no-load funds, and there might also be other fees associated with no-load funds, such as yearly maintenance fees in IRA accounts and redemption fees designed to discourage shareholders from jumping in and out of funds in an attempt at market timing.

[edit] Active management

Most open-end funds are actively managed, meaning that a portfolio manager picks the securities to buy, although index funds are now growing in popularity. Index funds are open-end funds that attempt to replicate an index, such as the S&P 500, and therefore do not allow the manager to actively choose securities to buy. These fees are commonly referred to as 12b-1 fees in U.S.

[edit] Net asset value

The price per share, or NAV (net asset value), is calculated by dividing the fund's assets minus liabilities by the number of shares outstanding. This is usually calculated at the end of every trading day.

[edit] Hedge funds

Hedge funds are typically open-ended and actively managed. However, their NAV is typically calculated monthly.

[edit] Examples

U.S. mutual funds:

• T. Rowe Price
• Fidelity Investments' Magellan
• The Vanguard Group's S&P 500
• PIMCO Total Return

[edit] See also

• Collective investment schemes
• Mutual funds
• Unit trusts
• OEICs
• SICAVs
• Closed-end fund

v • d • e Investment management Collective investment scheme structures Common contractual fund · Fond commun de placement · Investment trust · Unit trust · Mutual fund · ICVC · SICAV · Unit Investment Trust · Exchange-traded fund · Offshore fund · Unitised insurance fund Investment Styles Active or Passive management · Value or Growth investing · Hedge fund · Socially responsible investing · Fund of funds · Manager of managers · Index fund Theory & Terminology Efficient-market hypothesis · Net asset value · Open-end fund · Closed-end fund Related Topics List of asset management firms · Umbrella fund · UCITS