ICI Guide to Closed End Funds

ICI Guide to Closed End Funds - a guide to Closed-End Funds...

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a guide to Closed-End Funds A closed-end fund is a type of investment company whose shares are listed on a stock exchange or are traded in the over-the-counter market.
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Table of Contents Professional Management . ..................................................... 2 Portfolio Composition . ........................................................... 3 Types of Closed-End Funds . ................................................... 4 Closed-End Stock Funds ................................................... 5 Closed-End Bond Funds .................................................... 6 Finding Information About Closed-End Funds . ..................... 8 Pricing . .................................................................................. 10 Investment Return . ................................................................ 11 Taxes . ..................................................................................... 12 Regulation and Disclosure . ................................................... 12 Fees and Expenses . ................................................................ 13 Buying and Selling Shares . .................................................... 13 Shareholder Information . ..................................................... 14 Before the Purchase . .............................................................. 15
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2 A Guide To Closed-End Funds A Guide To Closed-End Funds 3 A closed-end fund is a type of investment company whose shares are listed on a stock exchange or are traded in the over-the-counter market. The assets of a closed-end fund are professionally managed in accordance with the fund’s investment objective and policies, and may be invested in stocks, bonds, or a combination of both. Like other publicly traded securities, the market price of closed-end fund shares fluctuates and is determined by supply and demand in the marketplace. This brochure provides an overview of some of the types of closed- end funds and how they operate. However, each closed-end fund is different, and investors should learn more about a particular fund before investing. Professional Management A closed-end fund’s investment portfolio is professionally managed by the fund’s investment manager. A closed-end fund raises cash for investment by selling a fixed number of shares, and the manager invests the cash in accordance with the fund’s investment objective and policies. The amount available for investment by a closed-end fund does not depend on redemptions or purchases by investors, because the fund does not issue redeemable securities and typically does not offer its securities for sale on an ongoing basis. A closed- end fund does not need to liquidate securities to meet investor demands for cash or to purchase securities to invest the proceeds of investor purchases. Because a closed-end fund is not subject to the demands of
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This note was uploaded on 09/12/2008 for the course BNAD 301 taught by Professor Sugiyama during the Spring '07 term at Arizona.

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ICI Guide to Closed End Funds - a guide to Closed-End Funds...

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