InvestorQ : What is a close-ended mutual fund?
priya Shah made post

What is a close-ended mutual fund?

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Priyanka Singh answered.
1 year ago

A close-ended fund is a feature of Mutual fund which defines the time when investors cannot join or leave the scheme of a mutual fund at any point of time. As the name suggests, close-ended mutual fund means that the investors can join the scheme only for specific time and leave only at a specific period of time. Basically, it is close for an investor with respect to start and stop investment.

So if a Mutual fund scheme is close-ended, then it means that you can start your mutual fund investment only when the scheme is available for investment, after that no new investor can join the scheme. There is a time limit to investors and so you can join and stop the investment only to a specific period. Tax-savings funds, also known as ELSS can be considered as close-ended funds as they have a certain lock-in period. Investors can redeem their Mutual Funds only after completion of the lock-in period. Other than ELSS, Tata Infrastructure Tax Saving Fund, Reliance Close Ended Equity Fund - Series A, etc. are also close-ended scheme with specified entry and exit in investment.