Professional Documents
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Mutual Fund
The fund's net asset value (NAV) is determined each day. Each mutual fund
portfolio is invested to match the objective stated in the prospectus.
It has been shown in study after study that a majority of mutual funds fail
to beat the market. Also, picking mutual funds purely on the basis of past
performance usually does not work.
Closed-End Investment
Most mutual funds are open-end funds, not closed-end. The main difference
with closed-end funds is that market price of the shares is determined by
supply and demand and not by net-asset value (NAV).
Open-End Fund
A mutual fund that continues to sell shares to investors, and will buy back
shares when investors wish to sell.
Open-end funds have no limit to the number of shares they can issue. The
majority of mutual funds are open end.