A closed-end fund is a mutual fund that has an initial offering (IPO) of shares, and once those shares are sold, no additional shares are issued. Since it is a public offering, closed-end funds must register with the Securities and Exchange Commission (SEC). After the IPO is complete, the shares in a closed-end fund are traded on a public exchange such as the New York Stock Exchange or the NASDAQ.In the secondary market, the price at which a closed-end fund trades is set by the market and may be less or more than the fund’s net asset value. This is in contrast to open-end funds, which continually accept investor money for the current net asset value of the fund. In addition, unlike an open-end fund, shares of a closed-end fund are not redeemed by the fund. Closed-end fund investors who seek to “cash out” must sell their shares in the market at the current market price. There are many types of closed-end funds. The mix of underlying assets in the fund’s portfolio determines the type. For instance, a fund may invest only in blue chip stocks. Another closed-end fund may invest solely in municipal bonds. Regardless of the underlying asset class, closed-end fund portfolios are managed by a separate entity called an investment advisor. Just like the fund itself, the investment advisor is also required to register with the SEC.