What Is Open-Ended Mutual Fund?
An open-end mutual fund issues a total number of shares that investors want to buy. It also buys shares back from investors. On the other hand, closed-end funds limit the number of shares that it issues. It also doesn’t allow you to buy back shares. As per Savepro , a financial advisor, the total value of an open-end share is equal to the net asset value (NAV). The NAV is calculated by decreasing the liabilities from the fund’s total asset value and then dividing the amount from total shares outstanding. Also, Savepro suggests investors choose open-ended funds over close-ended funds. This is because of varied reasons. Firstly, open-end funds offer investors to meet their investment objectives, such as investing in small and large-cap companies or investing for growth, etc. Secondly, it helps investors build a diversified portfolio. Third, the fund is closed to new investors if the asset value of the funds becomes too large for its objectives. Lastly, open-end funds are not old