A mutual fund can be converted into a closed-end fund on either an interim or permanent basis. This can be due to several factors, but the main one is usually to maintain efficiency in the management of the mutual fund.
There are mutual funds that have a very specific investment strategy, or defined limits. In these funds, if the capital raised from investors is large, it can be difficult to execute the investment style efficiently. When this happens, the fund is usually closed, either to the entry of new investors or to the realization of new investments by current investors.
Types of investment funds
AFI Universal gives me peace of mind, because it is concerned that the person responsible for executing the investment strategy defined by the Investment Committee has an impeccable track record and relevant and sufficient experience and capacity to carry out the investment negotiations of the fund in which I invest.
The linkage to this fund is made through the securities intermediaries, which will exhaust the respective internal steps of their institution and will facilitate the opening of the brokerage account when necessary.
The creation and administration of the fund’s portfolio is the responsibility of a managing company, which must be registered with the CNV in the registry of Agents for the Administration of Collective Investment Products; while a depositary company is in charge of the custody and safekeeping of the securities and money, which must also be registered in the category of Agent for the Custody of Collective Investment Products. Both perform their functions in accordance with a management regulation.
There are open and closed mutual funds. Open-end funds do not have a capitalization limit, so as investors join the fund, the fund grows and can do so unlimitedly.
An investor’s profit or loss is produced by the difference between the price at which he buys and the price at which he subsequently sells the shares. In the case of closed-end funds, the price depends on supply and demand as well as the specific expectations of the fund in question.
Example of a closed fund
1. What is a mutual fund? 2. What is a closed-end fund? 3. What are the differences between a closed-end fund and an open-end fund (mutual fund)? 4. Who manages a closed-end fund? How to participate in a closed-end fund….
What is a mutual fund? 2. What is a closed-end fund? 3. 3. What are the differences between a closed-end fund and an open-end fund (mutual fund)? 4. 4. Who manages a closed-end fund? 5. How to participate in a closed-end fund….