Two types of mutual funds are open and closed-end funds. Open-end mutual funds sell an unlimited number of shares to fund shareholders. Closed end mutual funds sell a limited number of shares once.
A closed-end mutual fund looks like a stock of a publicly traded company. It is traded on some stock exchange, you buying or sell shares in the fund through a broker just like a stock (including paying a commission), the price fluctuates in response to the fund's performance and (very important) what people are willing to pay for it.
Plus, closed end mutual funds tend to invest a greater share of its assets in securities that are less liquid than those which open-end funds invest in.
Closed-end mutual funds are different than traditional mutual funds in several ways:
1. it is closed to new capital after it begins operating, and
2. its shares (typically) trade on stock exchanges rather than being redeemed directly by the fund.
3. its shares can therefore be traded during the market day at any time. An open-end fund can usually be traded only at the closing price at the end of the market day.
4. a CEF usually has a premium or discount. An open-end fund sells at its NAV (except for sales charges).
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