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ber of outstanding shares in the mutual fund. The NAV is calculated daily, at the close of the business day. Unlike common stocks, which investors may purchase at any time during the business day, and sometimes later due to extended-hours trading, open-end mutual funds are traded at the end of the day due to the pricing structure of the NAV.

So, which are better: closed-end or open-end funds? The answer is neither. Both have their advantages and disadvantages. Open-end funds are bought and sold by the mutual fund company, whereas closed-end funds are traded on stock exchanges. Therefore, if you want to purchase shares of a closed-end fund, you will need to find an investor who wants to sell his, just as you would with stocks. However, you may be able to purchase shares of a closed-end fund at a discount. Open-end shares are always bought and sold at NAV. Of course, you may also wind up paying a premium price for your closed-end shares. In the end, it matters more what the funds invest in, what their track record is, and what your investment goals and objectives are, rather than whether the fund is open- or closed-end.


Open-end mutual funds are either load or no-load funds. That means they either have some sort of sales charge, or they don’t. However, just because you are investing in a no-load fund doesn’t mean that, there aren’t any types of expenses. Load mutual funds charged the investor a sales charge for purchasing the mutual fund. Loads may be charged either at the time of sale (front-end load) or when the mutual fund is redeemed (back-end load). There are three different types of load funds, and their share classes differentiate them: A, B, and C

A Shares When you purchase a mutual fund’s Class A shares, you will pay an up-front sales charge. The charge may range between four to eight percent of the public offering price initially, with declining sales charges as you purchase more shares. With the initial purchase, and any subsequent purchases, the investor pays the NAV per share plus the applicable load. Thus, the entire amount of money isn’t invested

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