Closed Fund

DEFINITION of 'Closed Fund'

A mutual fund that has been closed - either temporarily or permanently - to new investors because the investment advisor has determined that the fund's asset base is getting too large to effectively execute its investing style.


Generally, current shareholders in a closed mutual fund are permitted to continue investing in the fund, but sometimes they are also be precluded from making additional investments.

A closed mutual fund should not be confused with a closed-end fund. This type of fund has a fixed number of shares, generally invests in specialized sectors, and is structured and listed as a stock on a stock exchange.