Management Companies: Closed-End Funds
Like open-end funds, closed-end management companies offer fund shares made up of a portfolio of securities. Structurally, they are identical. Initiated by a sponsor organization and set up by an elected board of directors, they are operated by a set of independent entities that manage the fund, sell the shares, and maintain the records.
Unlike open-end funds, however, closed-end funds raise capital through an initial public offering (IPO), after which they no longer issue new shares. Once purchased, closed-end funds are traded on the secondary market like a stock. Closed-end funds are said to be negotiable, since their ownership can be transferred across individuals.
Closed-end funds purchased during an IPO are not subject to sales loads, but the broker will usually charge