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Finance Glossary

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Open End Fund


See Closed End Fund first. An open end fund is your typical vanilla mutual fund. That fund owns hundreds of securities and maybe millions of shares in them. Each day, the prices of those securities change and close at a given value. At that value, the fund then prices itself with a Net Asset Value which reflects the total value of the securities prices times the number of shares of each that the fund owns - then divided by the number of shares outstanding that are owned by investors in the mutual fund. An open-end fund must buy and sell shares in the fund at each day's NAV. Since NAV isn't determined until the end of the day, an open end fund will have no transactions in its shares during a trading day.