Financial Education

An open-ended mutual fund is a pooled investment vehicle. Its shares are publicly offered and can be purchased and redeemed daily at the closing net asset value. Investors must typically announce their intention to redeem shares prior to the end-of-day close, but must wait for the closing price to determine the proceeds they will receive. This eliminates the risk that the fund manager must constantly buy and sell securities solely to meet redemptions. The lag between the decision to buy or sell and the time at which the trade is actually executed can be significant, particularly when the fund invests in foreign securities (in different time zones.)

For more information, see all articles on: International Investing, Investing in Stocks, Investing in bonds

See also:

Exchange Traded Funds (ETFs)

Closed End Country Funds

Market Timing by Mutual Funds

Asset Fire Sales in Equity Markets

Do Market Timing Hedge Funds Time the Market?