Closed-end fund

A closed-end fund (CEF) is a form of collective investment vehicle whereby the number of shares in the fund is fixed. Usually, those seeking to invest in an existing closed end fund must purchase shares from existing holders. Similarly, to exit an investment in a closed end fund, an investor must find another party to sell the shares to.

In contrast, the size of an open ended fund is not fixed. New units are created when investors want to enter the fund. Similarly, units are destroyed when investors wish to exit.

Another term for closed-end fund is an investment company.

In in specific circumstances, a closed end fund maybe an investment trust, but it has to meet the legal requirements to do so. All investment trusts are investment companies (or closed-end funds) but not all investment companies are investment trusts.