Closed-end funds (CEFs) are similar to traditional open-end mutual funds in that professionally managed investment companies pool investors’ capital and invest in stocks, bonds or other securities according to an overriding investment objective. However, there are several key differences between closed-end funds and open-end funds that investors should be aware of. Closed-end funds trade on an exchange similar to exchange-traded funds (ETFs), but they are valued differently. Closed-end funds are essentially a mix between a mutual fund and a stock; they have a net asset value (NAV) and a share price. Closed-end funds do not issue redeemable shares nor do they continuously offer shares, which allows fund managers to work with a stable pool of capital. Closed-end funds have an initial public offering, much like a start-up company. After the initial public offering is closed, the fund’s shares will begin to trade on a secondary market.