Editing Closed-end fund (section)

{{Short description|Professionally managed investment fund}}
{{Distinguish|Zombie fund{{!}}closed fund}}

A '''closed-end fund''' (CEF), also known as a '''closed-end mutual fund''',<ref>{{cite web | url=https://www.investopedia.com/articles/mutualfund/07/closed_end_funds.asp | title=An Introduction to Closed-End Mutual Funds }}</ref><ref>{{cite web | url=https://www.broadridgeadvisor.com/kt/trns.aspx?xd=IV13&xsl=content&il=tm&firm=Weinberg%20Lieberman%20%26%20Co%2E | title=What is the difference between an open-end and a closed-end mutual fund? }}</ref><ref>{{cite web | url=https://corporatefinanceinstitute.com/resources/wealth-management/closed-end-mutual-funds/ | title=Closed-end Mutual Funds }}</ref><ref>{{cite web | url=https://corporatefinanceinstitute.com/resources/career-map/sell-side/capital-markets/open-end-vs-closed-end-mutual-funds/ | title=Open-end vs Closed-end Mutual Funds }}</ref> is an investment vehicle  fund that raises capital by issuing a fixed number of shares at its inception, and then invests that capital in financial assets such as stocks and bonds. After inception it is closed to new capital, although fund managers sometimes employ [[Leverage (finance)|leverage.]] Investors can buy and sell the existing shares in secondary markets.<ref name="thaubook">{{cite book |last1=Thau |first1=Annette |title=The Bond Book |date=2001 |publisher=McGraw Hill |location=New York |isbn=0-07-135862-5 |pages=340–341}}</ref><ref>Lemke, Lins and Smith, ''Regulation of Investment Companies'', §9.05 (Matthew Bender, 2014 ed.).</ref><ref name="SECClosedEndFund">{{Cite web|title=Closed-End Fund Information|url=https://www.sec.gov/answers/mfclose.htm|website=SEC.gov|publisher=[[U.S. Securities and Exchange Commission]]|date=2013-01-16|access-date=2015-12-16}}</ref>

CEFs are the oldest form of pooled investment still used in the United States, dating to the 1800s. In the United States, closed-end funds sold publicly must be registered under both the [[Securities Act of 1933]] and the [[Investment Company Act of 1940]].<ref>Lemke, Lins and Smith, ''Regulation of Investment Companies'', §5.02[2][b] (Matthew Bender, 2014 ed.).</ref>

U.S.-based closed-end funds are referred to under the law as ''closed-end companies'' and form one of three [[U.S. Securities and Exchange Commission|SEC]]-recognized types of investment companies along with [[mutual fund]]s and [[unit investment trust]]s.<ref name="SECClosedEndFund" />

Like their better-known open-ended cousins, closed-end funds are usually sponsored by a fund management company. The fund's charter, prospectus and the applicable government regulations specify the types of investments the fund manager is permitted to buy. Some funds invest in stocks, others in bonds, and some in very specific assets (for instance, tax-exempt bonds issued by the state of [[Florida]] in the USA).