Dual Purpose Fund

A closed-end investment company has shares that trade publicly, similar to the shares of public companies. These shares go up and down in the market, just like regular stocks.

A dual purpose fund will have two classes of stock. One type of shares will trade on the stock exchange, just like any other closed-end fund. The other type of stock works differently. Instead of bouncing around in the open market, it gives the holder income from the funds dividends.

So the first class lets investors make money on capital appreciation. If the fund's investments make money, the value of the shares go up. The investor can make money by selling at the higher price...capital appreciation.

The second class of shares only relates to dividends. The investor makes money by receiving regular cash payments, based on the dividends the fund earns from its investments. There's less upside here. But also less chance of losing money.

The two class of shares appeal to different types of investors. Wild-eyed aggressive investors can bet their money on big returns. They buy the common shares that trade in the market. Meanwhile, retiring wallflower types looking for a steady-eddy source of dividend payments can go for for the dividend class of stock.

Dual Porpoise Fun is something totally different, and not legal in most states.