Closed-End Fund Definition

Closed-End Fund Definition

Learn the definition of closed-end fund and other ETF terminology from the glossary.

Reviewed by: Staff
Edited by: Staff

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)

ETF Glossary is’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.