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Mutual Fund Premier: Part III - Types of Mutual Funds

 

 

 

What are open-ended and closed-ended mutual funds?

 

In an open-ended mutual fund there are no limits on the total size of the corpus. Investors are permitted to enter and exit the open-ended mutual fund at any point of time at a price that is linked to the net asset value (NAV). In case of closed-ended funds, the total size of the corpus is limited by the size of the initial offer.

 

Do both open-ended and closed-ended funds come out with an initial offering?

 

Yes. But the only difference is that in case of open-ended funds, a month after the initial offer closes the continuous offer period starts when the investor can enter and exit the fund at a price linked to the NAV

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