Closed-end fund
A closed-end fund (CEF) is a mutual fund that trades on a stock exchange like a company stock.
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Expanded Definition
The main difference between a CEF and an exchange-traded fund (ETF) is the propensity of a CEF to trade at a premium or discount to its net asset value (NAV). While ETF's are arbitraged to within a fraction of a percent from their NAV, CEF's lack that level of arbitrage, perhaps because they are usually more thinly traded, and are not viewed as adequately liquid. Sometimes a CEF can trade for a discount of 10%, 20%, or even more.
Unlike the (probably) more familiar open-end mutual fund, a closed-end fund issues a certain number of shares when it first gets started, and that's all the shares that are available. It's closed to new money, however, investors can buy and sell the shares among themselves on the market. So you can invest in a closed-end fund, but only when someone else wants to divest and sells shares to you.
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