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need for this. There are plenty of funds around offered by many companies that can closely match the objectives of a closed fund. So while FMAGX is closed, Fidelity, Vanguard, T. Rowe Price, and countless others offer similar funds. No need to rush to buy in. A closed fund can also open up again at the discretion of the fund manager and its board of trustees. Now that we have learned about open-end funds, it's time for the closed-end funds.

Closed-end funds are the other type of funds, but they are less popular than open-end funds. Closed-end funds are also a pool or collection of several securities designed to achieve certain financial goals, but their shares are traded just like stocks, unlike open-end funds which are traded based on NAV. In fact closed-end funds are more like stocks than funds. Here's how they work.

A closed-end fund is created by an investment company and managed by a fund manager and sometimes a team of experts. A certain number of securities such as stocks, bonds, and cash are purchased to make up the fund. The money to create the fund is provided by initial investors. This means that from the get-go, the closed-end fund has a fixed number of securities in its portfolio and these numbers for the most part stay constant for the life of the fund. The fund is then divided into a number of shares which are sold to the public under its symbol. The difference from an open-end fund is that the closed-end fund's shares are traded just like stocks on a stock exchange (such as NYSE or AMEX). For all intents and purposes, a closed-end fund is traded like a regular stock. And just like a regular stock, its share price rises and falls based on supply and demand. As the numbers and proportions of a closed-end fund's portfolio are kept fixed, its net assets are only affected by the portfolio's value. The fund's portfolio does not grow in size as new investors purchase the shares, and although there maybe additional shares issued at times, they are not issued on demand. The shares are …