Closed-End Fund

A closed-end fund raises a fixed amount of capital in an initial public offering and then trades on an exchange like a stock, with a fixed number of shares, rather than continuously issuing and redeeming shares the way an open-end mutual fund or ETF does.

Because the share count is fixed, a closed-end fund's market price can trade well above or below its NAV, depending on investor demand, sometimes for years at a time. Buying a fund at a persistent discount to its NAV is a strategy some income investors specifically target.