NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles
Which feature distinguishes an open-ended mutual fund scheme from a closed-ended scheme?
An open-ended mutual fund scheme allows investors to buy and redeem units on an ongoing basis at prices linked to NAV. Closed-ended schemes have a fixed maturity and are bought mainly during the NFO, with exit through listing or maturity.
- AUnits can be bought and redeemed on an ongoing basis at NAV-related pricesCorrect
- BUnits are issued only once during the new fund offer
- CUnits can be redeemed only on maturity of the scheme
- DUnits are always listed and cannot be redeemed from the fund
Explanation
An open-ended scheme offers units for sale and repurchase continuously at NAV-linked prices, so it has no fixed maturity. Closed-ended schemes have a fixed tenure and redemption happens at maturity, with exit usually through exchange listing.
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