Glossary

A closed-end fund is a type of investment fund that issues a fixed number of shares during an initial public offering (IPO) and then trades on an exchange like a stock. 📊

Unlike open-end funds (e.g., mutual funds), closed-end funds do not continuously issue or redeem shares. Their share prices are determined by market demand and supply, which can lead to shares trading at a premium or discount to their net asset value (NAV).

For example, the "ABC Closed-End Income Fund" might issue 1 million shares during its IPO and then trade on the NYSE, where investors can buy and sell shares throughout the trading day.

Fun fact: The first closed-end fund was the Foreign & Colonial Investment Trust, launched in the United Kingdom in 1868. 🎩 Its initial purpose was to help investors diversify their portfolios by investing in international bonds, a novel concept at the time!