Close ended funds v/s open ended funds

Close ended funds v/s Open ended funds

Close Ended Funds

Subscription is kept open only for a limited period.
Does not allow investors to withdraw funds as when required by the investor.
Has a fixed maturity period (usually for a period between 5 to 15 years).
Are listed on the secondary markets.
The units generally sell at a discount in the secondary market (often varying between 5 to 20 percent).
On maturity entire investment is liquidated irrespective of favourable or unfavourable market conditions and the proceeds are given to the investor.
Fund is better managed as the corpus is available to the fund manager throughout the duration of the scheme and there is no pressure to maintain liquidity to meet redemption demand.

Open Ended Funds

Scheme accepts funds from investors by offering its units on continuous basis.
Allows investors to withdraw funds on a continuous basis under a repurchase agreement.
Does not have a fixed maturity period.
Ordinarily not listed.
Generally repurchased on current net asset value (NAV).
Timing of withdrawal is decided by the investor
Fund manager must do a balancing act as he must maintain liquidity to meet redemption demand.

Close Ended Funds	Open Ended Funds
Subscription is kept open only for a limited period.	Scheme accepts funds from investors by offering its units on continuous basis.
Does not allow investors to withdraw funds as when required by the investor.	Allows investors to withdraw funds on a continuous basis under a repurchase agreement.
Has a fixed maturity period (usually for a period between 5 to 15 years).	Does not have a fixed maturity period.
Are listed on the secondary markets.	Ordinarily not listed.
The units generally sell at a discount in the secondary market (often varying between 5 to 20 percent).	Generally repurchased on current net asset value (NAV).
On maturity entire investment is liquidated irrespective of favourable or unfavourable market conditions and the proceeds are given to the investor.	Timing of withdrawal is decided by the investor
Fund is better managed as the corpus is available to the fund manager throughout the duration of the scheme and there is no pressure to maintain liquidity to meet redemption demand.	Fund manager must do a balancing act as he must maintain liquidity to meet redemption demand.

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