# Closed-End Fund

*Saving & Investing — Finicade finance glossary*

A closed-end fund issues a fixed number of shares and then trades on an exchange, so its price is set by supply and demand rather than by NAV.

A closed-end fund issues a fixed number of shares at launch and then trades on an exchange like a stock, so its price is set by supply and demand rather than by NAV. Persistent discounts to NAV are common, which attracts value investors and frustrates everyone else. Because the fund never faces redemptions, managers can hold illiquid assets and use leverage — a genuine structural advantage that also amplifies losses.

**Also known as:** CEF, investment trust

**Related terms:** [Net Asset Value (NAV)](https://finicade.com/glossary/net-asset-value), [Mutual Fund](https://finicade.com/glossary/mutual-fund), [ETF (Exchange-Traded Fund)](https://finicade.com/glossary/etf), [Leverage](https://finicade.com/glossary/leverage), [Liquidity](https://finicade.com/glossary/liquidity)

Source: https://finicade.com/glossary/closed-end-fund