Open/closed-ended investment definition

In investments, the terms open-ended and closed-ended are used to designate whether a fund has an open or fixed number of shares in circulation.

A closed-ended investment has a fixed number of shares in circulation. As a result, demand and supply factors can mean that the price of the closed-ended investment varies from the value of its underlying assets (called net asset value, or NAV).

An open-ended investment, on the other hand, does not have a fixed number of shares in circulation. That means that there is less chance of supply and demand impacting its price.

Most exchange traded funds (ETFs) are open-ended investments, and thanks to authorised participants and intraday NAV calculations (INAV), an ETF is likely to trade very closely to the value of its underlying assets.

Learn more about ETFs

Find accumulated distribution ETFs using our ETF screener or learn more about ETF trading with IG.

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