Closed-end funds (CEFs) are different from open-end funds (commonly known as mutual funds) in some significant ways.
For example, CEFs trade on an exchange intraday, just like exchange-traded funds (ETFs).
However, mutual funds and ETFs issue and redeem shares at their net asset value (NAV), so the number of shares fluctuates due to demand.
Conversely, CEFs have a fixed number of shares. The price of a CEF is determined by supply and demand in the secondary market, so the shares can trade at a persistent premium or discount to the underlying NAV. (more)
Please share this article
No comments:
Post a Comment