Common Answers to Common questions.-8

What are close ended funds and open ended funds?

The funds which accept subscription initially and do not accept any fresh investment is known as closed ended funds. This underlines the fact that close ended funds have specific time frame and limit the amount they accept. Does this mean that you will not be able to invest in close ended funds or the amount invested initially is also locked in for a fixed period? No. What it implies is that the fund will not be issuing additional units during the period in case of redemption of units. The periodicity of redemption and the frequency of declaration of NAV is detailed in the offer document, provided at the initial time of the offer. Normally the units are listed in the stock exchanges for instant liquidity. There are also funds which restricts the redemption, by redeeming them only during certain periods.