Legal Definitions - closed-end fund

A closed-end fund is a type of investment fund that operates like a mutual fund, but with a fixed number of shares. Unlike mutual funds, closed-end funds do not issue new shares to investors. Instead, investors buy and sell shares on a stock exchange, just like they would with a stock.

For example, let's say a closed-end fund has 1 million shares. If you buy 100 shares, you own 0.01% of the fund. If you sell those shares, they are bought by another investor, not the fund itself.

Closed-end funds can be a good way to invest in a diversified portfolio of stocks or bonds. However, they can also be riskier than mutual funds because their share prices can be more volatile.