Closed End Funds

Closed-End funds are similar to mutual funds except that they are closed to new investors.

In a Closed-End fund a fixed number shares are issued when the fund is formed and then the fund is closed to any new additional investors. But that does not mean a new investor cannot buy a Closed-End fund unit in the market. The units
of the Closed-End fund trade in the market where one can buy them. The units will trade either at a discount from its Net Asset Value (NAV) or at a premium to NAV.

A mutual fund is open-ended meaning new investors are accepted anytime and existing investors can redeem their units at any time and exit the fund.The fund basically issues new shares when more investors are attracted to the fund.

There are many closed-funds in the market to invest overseas. Some of them are listed below:

1. The Chile Fund – CH
This fund has assets of $233.0 Mil and is now trading at a premium to NAV.Most of the major Chilean stocks are in this fund. If you are looking for exposure to Chile, this fund is an easy way to accomplish that.

2. The Central Europe and Russia Fund – CEE
This one has $871M in assets and is trading at a discount now.As the name suggest it invests in the former communist bloc countries and Russia.

3.The New Ireland Fund – IRL
This fund is trading at a discount to NAV of about 11%. If you believe in the recovery of the Irish markets, you can pick up a few units of this fund.


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