Understanding Closed-Ended Funds or Schemes

What are closed-ended funds/schemes in mutual funds?

Closed-Ended Funds or Schemes are specific types of mutual fund schemes that are available for subscription only during a designated timeframe, often referred to as the New Fund Offer (NFO) period. They come with a predetermined maturity date, typically ranging from 3 to 5 years. Unlike open-ended funds, once the NFO period is over, new subscriptions aren't accepted. However, post NFO, these funds are generally listed on stock exchanges, enabling investors to buy or sell units in the secondary market. Some closed-ended funds also provide an option for periodic repurchase, allowing investors to sell units back to the mutual fund at NAV related prices, offering them a potential exit strategy.
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