Open-ended Mutual Fund vs Closed-ended Mutual Fund
Difference between Open-ended Mutual Fund and Closed-ended Mutual Fund
| Basis of Difference | Open-ended Mutual Fund | Closed-ended Mutual Fund | |
|---|---|---|---|
| Objective | To earn relatively higher returns than benchmark | Vs | To replicate the performance of the index the ETF tracks |
| Meaning | Available for subscription and repurchase on a continuous basis on all working days | Vs | Available for subscription only during a specified period on their launch |
| Investment | Anytime, remain open on all working days | Vs | Either at the time of their launch or they can buy or sell the units of these schemes on the stock exchanges where the units are listed |
| Fund Size | Fluctuates | Vs | Fixed |
| Transaction | Transactions are possible with Mutual Fund House | Vs | Transactions are possible with Mutual Fund House (on predefined dates) or anytime with a stock exchange where the units are listed |
| Unit price | Net Asset Value (NAV) | Vs | Quoted price, which may not be same as NAV |
| Redemption date | No predetermined date of redemption | Vs | Predetermined date of redemption - fixed |
| Lock-in period | Nil | Vs | Yes, generally ranging from 3-7 years |
| Brokerage | No, if transacted directly | Vs | Yes, if transacted through a stock exchange |
| Demat Account | Not required | Vs | Mandatory, if transacted through a stock exchange |