When the shares are sold, the fund does not issue more shares. Tools and calculators. Life events. In the United States, closed-end funds sold publicly must be registered under both the Securities Act of and the Investment Closed end investments Act of Because a closed-end fund is listed on the market, it must obey certain rules, such as filing reports with the listing authority and holding annual stockholder meetings. The information contained in this material does not constitute advice on the tax consequences of making any particular investment decision. Please read more a valid e-mail address. Closed-end funds are one of two major kinds of mutual closed end investments, alongside open-end funds. All information you provide will be used by Fidelity solely for the purpose of sending the e-mail on your behalf. Learn more. That also includes using options closed end investments to generate more income. Investors need to be aware of these differences before buying a closed-end fund. Open-end funds determine the market value of their assets at the end of each trading day. They will take your money, add it to the portfolio, and create more shares. Since closed-end funds are less popular, they have to try closed end investments to win your affection. Thus it may become overweight in the shares of lower perceived quality or underperforming companies for which there is little demand. In many cases, a portion of the fund's payout is a return of principal. Mutual funds closed end investments no taxes on income derived from their investments. This further reduces the income benefit of leverage to the common shareholder, while retaining the additional volatility.