What are open-ended funds/schemes?
Open-ended mutual fund schemes are investment options that remain available for subscription and redemption throughout the year. These funds do not have a fixed maturity date and allow investors to buy or sell units at any time based on the scheme’s Net Asset Value (NAV).
Key characteristics of open-ended funds
- No fixed maturity—investors can hold units as long as desired
- Units are purchased and redeemed at the fund's prevailing NAV
- Available for investment both during and after the New Fund Offer (NFO) period
- Fund managers can continuously issue new units and accept redemptions
Unlike close-ended funds that restrict investments to the NFO window and list on an exchange thereafter, open-ended funds offer greater flexibility and liquidity.
What if...
| Scenario | Explanation |
|---|
| You want to redeem any time | You can exit the fund anytime and receive NAV-based payout, subject to exit load (if any). |
| You missed the NFO | No worries—open-ended funds accept investments even after the NFO period. |
| You want to start an SIP | Most open-ended funds support SIPs, allowing systematic investments. |
| You compare with a close-ended fund | Open-ended funds allow free entry/exit, while close-ended funds lock your money until maturity. |
Open-ended funds offer flexibility for both short- and long-term goals. Just ensure you review the fund's objective and exit load policy before investing.
Last updated: 16 Jun 2025
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