open-end fund

Definition

A fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Open-end funds raise money by selling shares of the fund to the public, much like any other type of company which can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments.
In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most open-end funds, shareholders are free to sell their shares at any time, although the price of a share in an open-end fund will fluctuate daily, depending upon the performance of the securities held by the fund. Benefits of open-end funds include diversification and professional money management. Open-end funds offer choice, liquidity, and convenience, but charge fees and often require a minimum investment. also called mutual fund.

Use open-end fund in a sentence

You may want to try and keep an open-end fund so that you know you are making money with your money.

​ Was this Helpful? YES  NO 3 people found this helpful.

I realized that it was and open-end fund and that meant that it was run and operated by an investment company.

​ Was this Helpful? YES  NO 5 people found this helpful.

The most common type of mutual fund is the open-end fund, in which new shares are created or liquidated/redeemed on a daily basis, in response to net buying or selling of that fund.

​ Was this Helpful? YES  NO 9 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
interval fund closed-end investment company