Open-End Fund Definition
An Open-End Fund is a mutual fund which can issue and redeem shares at any time. Most well-known funds, such as Fidelity's Magellan, Vanguard's S&P 500, and PIMCO Total Return, are open-end funds. An investor can purchase shares in such funds directly from the mutual fund company, or through a brokerage house. There may be a percentage charge levied on purchase or sale of shares--in this case, the fund is a "load fund"; if there are no such charges levied, the fund is "no-load." However, brokerages may charge commissions for the purchase of even no-load funds, and there may also be other fees associated with no-load funds, such as yearly maintenance fees in IRA accounts and redemption fees designed to discourage shareholders from jumping in and out of funds in an attempt at market timing. Most open-end funds are actively managed, meaning that a portfolio manager picks the securities to buy, although index funds are now growing in popularity. Index funds are open-end funds that attempt to replicate an index, such as the S&P 500, and therefore do not allow the manager to actively choose securities to buy.