What is the difference between an open-ended fund and a closed-ended fund?

In the state of Wisconsin, the legal framework governing investments is the Uniform Securities Act. This act provides a definition and requirements for open-ended funds and closed-ended funds, both of which are types of investment funds. An open-ended fund is a type of collective investment fund. This type of fund allows investors to buy and sell units in the fund at their discretion, usually at a fixed price. The composition of the fund is constantly changing, as the fund issuer can issue and redeem units as needed to meet investor demand. By contrast, closed-ended funds are also collective investment funds, but have a fixed number of units owned by investors. This means that all transactions occur on the open market, and the issuer does not check the size of the fund relative to investor demand. In addition, closed-ended funds often have higher management fees, as the fund manager does not need to alter the size of the fund in order to keep up with investor demand. Overall, open-ended and closed-ended funds are both types of collective investment funds, but the primary difference is that open-ended funds allow for changes in the size of the fund to accommodate investor demand, while closed-ended funds do not.

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What is the difference between an open-ended fund and a closed-ended fund?

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