A type of fund that has a fixed number of shares outstanding, which are offered during an initial subscription period, similar to an initial public offering. After the subscription period is closed, the shares are traded on an exchange between investors, like a regular stock. The market price of a closed-end fund fluctuates in response to investor demand as well as changes in the values of its holdings or its Net Asset Value. Unlike open- end mutual funds, closed-end funds do not stand ready to issue and redeem shares on a continuous basis.

A closed-end fund is a portfolio of pooled assets that raises a fixed amount of capital through an initial public offering (IPO) and then lists shares for trade on a stock exchange.

Like a mutual fund, a closed-end fund has a professional manager overseeing the portfolio and actively buying and selling holding assets. Similar to an exchange-traded fund, it trades like equity, as its price fluctuates throughout the trading day. However, the closed-end fund is unique in that, after its IPO, the fund's parent company issues no additional shares. Nor will the fund itself redeem—buy back—shares. Instead, like individual stock shares, the fund can only be bought or sold on the secondary market by investors.

Other names for a closed-end fund include the "closed-end investment" and "closed-end mutual fund."

While a closed-end fund has several unique characteristics that distinguish it from an open-end fund, such as a mutual fund or exchange-traded fund (ETF), it also shares several similarities with those two securities. Both closed-end funds and open-end funds are run by an investment advisor, through a management team that trades the portfolio. Both also charge an annual expense ratio and can make income and capital gain distributions to shareholders.

A closed-end fund is organized as a publicly traded investment company, and both it and its portfolio manager need a Securities and Exchange Commission (SEC) registration. It tends to be actively managed unlike most ETFs or index mutual funds, and its portfolio of securities typically concentrates on a specific industry, geographic market, or market sector.