3.5.1. Management Companies: Open-End Funds
Open-end management companies are what most people know as mutual funds. Mutual funds consist of a portfolio of securities offered to the public in the form of a fund. Every time shares in the fund are purchased, the shares are issued new by the mutual fund company. Additionally, when shareholders wish to sell their shares, they must sell them back to the mutual fund company. The mutual fund company will then “redeem” them and expire the shares. Thus, open-end funds continuously offer new shares, and becaus