Closed-End Fund Definition
Learn the definition of closed-end fund and other ETF terminology from the etf.com glossary.
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Learn more about Closed-End Fund
A closed-end fund (CEF) is a type of investment fund that raises a fixed amount of capital through an initial public offering (IPO) and then trades on a stock exchange like an ETF. Unlike ETFs, CEFs do not issue new shares after the IPO, so the supply of shares is fixed. This can cause the market price of CEF shares to deviate from their net asset value (NAV), the value of the underlying assets held by the fund. CEFs can trade at a premium or discount to NAV, creating potential opportunities for investors.
Related Terms
Exchange Traded Fund (ETF), Net Asset Value (NAV), Initial Public Offering (IPO)
