Open-end funds is not the total number of units fixed, in accordance with the requirements of the development of additional issue, which investors can redeem. Redemption price equal to the current net asset value of deducting fees.

As investors free to join or withdraw from such an open investment funds, but investors are no restrictions on the number, So will such a fund called the Common Fund. Most of the investment fund is open.

Closed-end funds issue a limited amount, once issued, will not issue additional. Investors can not redeem, but the Fund units on the stock exchange counters the open market or transfer, its transfer prices determined by market supply and demand.

The difference is as follows :

1. Fund-scale variability of different open-end funds issue of the fund units can be redeemed. and investors can purchase fund units at any time, the size of the fund is not fixed; Closed-end fund size is static.

2. Fund unit price of the deal, opening up different funds unit prices are based on the sale of fund units corresponding to the net asset value of foundation, the phenomenon will not be discounted. Closed-end fund unit prices will be more to the market supply-demand relations, prices fluctuated greatly.

3. Fund units trading different ways of open-end funds available to investors in the fund management company to purchase or redeem fund lower fees. Closed-end funds similar to the sale of stock transactions, the sale of the securities market, the need to pay charges and securities transaction taxes. In general, higher than those of open-end funds.

4, the investment strategies of different open-end fund must retain some funds to meet investor redemption at any time. make long-term investments will be subject to certain restrictions. And closed-end funds can not be redeemed, not from the reserve, can make good use of funds for long-term investment, long-term operating performance.

5, as required by market conditions different open-end funds are more flexible and extendable scale more easily, So apply to open higher, the larger the financial markets; and Closed-End Fund On the contrary, apply to the financial system is not yet perfect, the degree of opening up lower with the scale of the smaller financial markets.

Copyright Fund China 2009.

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