“In January we reported that a substantial amount of money, which would have probably gone into mutual funds in the past, has been heading instead into alternative unitized investments that build on many of the benefits that mutual funds offer. This issue of Insight examines one of those alternatives: closed-end funds.
Closed-end funds are experiencing rapid growth and emerging as a formidable competitor for investors’ dollars in the takeaway game. The attributes that these funds share with mutual funds presents fund industry players with both new challenges and opportunities.
Closed-end funds are investment funds with a finite number of units that were issued through an initial public offering and subsequently trade on a stock exchange. They differ from exchange-traded funds in that ETFs are structured as open-end investment management companies or unit investment trusts that continuously issue new shares and redeem existing ones. Together, closed-end funds and ETFs comprise the tradable funds market.”