DEFINITION of 'Open-End Management Company'

A company that distributes and redeems securities it issues. The most common open-end management companies are mutual fund companies which sell and redeem shares at the net asset value per share.

BREAKING DOWN 'Open-End Management Company'

This is just a fancy legal name for a mutual fund. An investor in an open-end fund essentially pools his/her money with other investors in order to attain economies of scale, professional management, etc.

This differs from a closed-end fund which has a limited number of shares available. Unlike with open-end funds, an investor in a closed-end fund typically sells his/her shares on the open market to another investor instead of back to the fund company.

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RELATED FAQS
  1. What are the primary differences between a closed end investment and an open end ...

    Learn what the primary differences are between open-end investments and closed-end investments, and the implications for ... Read Answer >>
  2. Can an open-ended fund's price appreciate significantly?

    Theoretically, open-end mutual fund prices can experience a significant increase in price. However, three factors need to ... Read Answer >>
  3. How do I purchase shares of a closed-end investment?

    Understand the difference between open-end and closed-end funds, and learn how an investor can purchase shares in a closed-end ... Read Answer >>
  4. Why is it that when investors realize returns on a mutual fund, its price tends to ...

    Mutual funds have been in existence since 1924, when the first open-ended mutual fund was created. Since then, the market ... Read Answer >>
  5. Can you place a stop-loss order on a mutual fund?

    First, remember that a stop-loss order is a limit order placed with a broker to sell a stock when it reaches a certain price. ... Read Answer >>
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