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Closed-end fund

A closed-end fund is an investment company with a generally fixed number of exchange-traded shares whose market price can differ from its net asset value.

By Betta Signals Research Desk · Reviewed October 24, 2026

Plain-English definition: A closed-end fund is an investment company with a generally fixed number of exchange-traded shares whose market price can differ from its net asset value.[1]

How the term is used

Unlike an open-end mutual fund, investors usually buy and sell existing closed-end fund shares in the market. Discounts, premiums, leverage, managed distributions, and liquidity can materially affect results.[1]

What to check before relying on it

A high distribution rate is not automatically investment income or economic return. Review the fund's NAV change, source of distributions, leverage, fees, and whether return of capital is involved.

Example

A fund with $10 of NAV per share can trade at $9. That 10% discount may narrow or widen independently of the underlying portfolio's performance.

Net asset value (NAV)DistributionMutual fund

Research last reviewed: October 24, 2026. This definition is educational and does not evaluate a particular security.

Sources

  1. SEC: Investor Bulletin on Publicly Traded Closed-End Funds — closed-end fund pricing, discounts, premiums, distributions, and leverage. Accessed October 24, 2026.