Closed-End & Interval Funds — Q&A

How investors buy and sell shares. Closed-end funds trade between investors in the secondary market; open-end funds transact directly with the issuer.

During the IPO (primary market). After IPO shares are sold, no prospectus delivery is required for secondary market trades.

At market price set by supply and demand. NAV is only a reference point (book value), not the transaction price.

Yes. Market price can be higher than, lower than, or equal to NAV.

Mutual funds may have sales charges. Closed-end funds are subject to commissions (like stocks and bonds) because investors buy from other investors, not the fund.

Yes. Unlike mutual funds, closed-end funds trade in the secondary market like other negotiable securities.

A unique closed-end fund that does not trade on the secondary market. Investors buy from the issuer at NAV (often plus a sales charge) and redeem at scheduled intervals. Legally structured as a closed-end management company.

No more than 25% of outstanding shares. Excess requests are fulfilled pro-rata.

The lock-up gives the manager flexibility to invest in less liquid, higher-risk/higher-yield investments instead of managing daily redemptions or secondary-market selling pressure.