A closed-end fund is an investment fund that issues a fixed number of shares one time, then stops accepting new money. After that, shares trade on a stock exchange like individual stocks, meaning their price changes based on supply and demand. This differs from open-end funds like mutual funds, which continuously accept new investments.
A closed-end fund launches and sells exactly one million shares to raise capital. Those million shares now trade on a stock exchange. If many investors want to buy them, the price may rise above the fund's actual asset value. If few want them, the price may fall below its true value.
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