What is the difference between an open-end mutual fund and a closed-end investment trust?
Both types of funds pool the assets of numerous investors into a single, professionally managed portfolio. However, mutual funds are open-ended, which means that units are continually available for purchase and redemption. Every investor making a transaction in the same fund on the same day pays (or receives) the same price, called the net asset value per share (NAV). A closed-end trust sells a fixed number of units only during an initial public offering. After that, units must be bought and sold on a stock exchange. Therefore the price fluctuates with supply and demand, and may be more or less than NAV. Some trusts offer redemptions at NAV once a year at a set time, starting after the first anniversary of the issue.What is net asset value (NAV)? NAV is the value of a fund unit, based on the daily closing price of all securities held by the fund, less an amount for fund expenses, and divided by the number of outstanding shares at that time. Click here for information on Sentry Select’s
