{"id":10804,"date":"2025-06-12T11:45:40","date_gmt":"2025-06-12T11:45:40","guid":{"rendered":"https:\/\/navia.co.in\/blog\/?p=10804"},"modified":"2026-08-07T05:53:01","modified_gmt":"2026-08-07T05:53:01","slug":"what-are-close-ended-funds","status":"publish","type":"post","link":"https:\/\/navia.co.in\/blog\/what-are-close-ended-funds\/","title":{"rendered":"What are Close-Ended Funds?"},"content":{"rendered":"<ul><li><a class=\"aioseo-toc-item\" href=\"#what-are-close-ended-funds\">What are Close-Ended Funds?<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#types-of-close-ended-mutual-funds\">Types of Close-Ended Mutual Funds<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#benefits-of-close-ended-funds\">Benefits of Close-Ended Funds<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#drawbacks-of-close-ended-mutual-funds\">Drawbacks of Close-Ended Mutual Funds<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#examples-of-close-ended-funds\">Examples of Close-Ended Funds<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#conclusion\">Conclusion<\/a><\/li><li><a class=\"aioseo-toc-item\" href=\"#frequently-asked-questions\">Frequently Asked Questions<\/a><\/li><\/ul>\n\n\n<blockquote style=\"border-left:4px solid #e8622f;background:#fdf1ec;padding:18px 22px;margin:1.5em 0;line-height:1.8\"><strong>\ud83d\udca1 Quick Answer<\/strong><br>A close-ended mutual fund is an investment scheme with a fixed maturity period, typically three to five years, that accepts money only during its New Fund Offering (NFO) period. After the NFO closes, no new investment is accepted and units cannot be redeemed with the fund house, though they are listed on stock exchanges.<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">There are two common categories included in mutual funds: <a href=\"https:\/\/navia.co.in\/blog\/open-ended-mutual-funds-and-how-to-invest-in-them\/?utm_source=blog&amp;utm_medium=internal_link&amp;utm_campaign=fund_types\">open-ended<\/a> and<strong> close-ended mutual funds<\/strong>. Open-ended funds offer flexibility in buying and selling at any time, while closed-ended funds operate with a fixed structure. But remember it also offers certain advantages and limitations. &nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">In this blog, we explain to you about <strong>what are close-ended mutual funds, <\/strong>how they work, their benefits, and risks with real-time examples. This guide will help you make informed decisions. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-1\" id=\"what-are-close-ended-funds\" style=\"color:#023368\">What are Close-Ended Funds?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\"><strong>Close-ended mutual funds <\/strong>are <a href=\"https:\/\/navia.co.in\/blog\/category\/investments\/\">investment<\/a> schemes that come with a fixed maturity period, typically 3 to 5 years. These funds are open for subscription only during the NFO (New Fund Offering) period. After completing the NFO period, no new investors can join, or existing ones can exit until maturity. To offer some liquidity, these funds are listed on stock exchanges that will help investors to buy or sell units like stocks. &nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">For a side-by-side view of how this structure compares with the alternative, see our guide to the <a href=\"https:\/\/navia.co.in\/blog\/difference-between-close-and-open-ended-funds\/?utm_source=blog&amp;utm_medium=internal_link&amp;utm_campaign=fund_types\">difference between close-ended and open-ended funds<\/a>. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-2\" id=\"types-of-close-ended-mutual-funds\" style=\"color:#023368\">Types of Close-Ended Mutual Funds<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Like open-ended funds, close-ended funds also have various types that are based on asset allocation:&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Types<\/strong>&nbsp;<\/td><td><strong>Definition<\/strong>&nbsp;<\/td><\/tr><tr><td>Equity close-ended funds&nbsp;<\/td><td>These are aim for long-term capital appreciation and ideal for investors with high-risk appetite. &nbsp;<\/td><\/tr><tr><td>Debit close-ended funds&nbsp;<\/td><td>It\u2019s safer and suitable for conservative investors and they can invest in bonds and debentures. &nbsp;<\/td><\/tr><tr><td>Hybrid close-ended funds&nbsp;<\/td><td>Combination of equity and debt instruments, offering balanced risk-return profile.&nbsp;<\/td><\/tr><tr><td>Fixed Maturity Plans (FMPs)&nbsp;<\/td><td>Most popular close-end debt fund, it has a fixed tenure and invest in instruments&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">If the hybrid variant interests you, read more on <a href=\"https:\/\/navia.co.in\/blog\/what-are-hybrid-mutual-funds\/?utm_source=blog&amp;utm_medium=internal_link&amp;utm_campaign=fund_types\">hybrid mutual funds<\/a> and on <a href=\"https:\/\/navia.co.in\/blog\/what-are-arbitrage-funds\/?utm_source=blog&amp;utm_medium=internal_link&amp;utm_campaign=fund_types\">arbitrage funds<\/a>. &nbsp;<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-fe48e5de wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-white-color has-text-color has-background has-link-color wp-element-button\" href=\"https:\/\/navia.co.in\/app.html\" style=\"background-color:#ec4d37\"><strong>Get Navia APP<\/strong><\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-3\" id=\"benefits-of-close-ended-funds\" style=\"color:#023368\">Benefits of Close-Ended Funds<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Close-ended funds offering you many benefits some of them are listed below;&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Benefits<\/strong>&nbsp;<\/td><td><strong>Definition<\/strong>&nbsp;<\/td><\/tr><tr><td>Stability&nbsp;<\/td><td>Fund managers can plan long-term strategies by using this strategy, and they don\u2019t need to worry about sudden withdrawals.&nbsp;<\/td><\/tr><tr><td>Disciplined Investing&nbsp;<\/td><td>It can prevent impulsive decisions, because the investment is locked in for long and fixed terms so they can think long-term. &nbsp;<\/td><\/tr><tr><td>Better Returns&nbsp;<\/td><td>Because of the stability of funds, fund managers can deploy strategies to get better returns. &nbsp;<\/td><\/tr><tr><td>Market Price Based on Demand&nbsp;<\/td><td>Selling on the stock exchange at prices that are determined by the demand and units of the scheme.&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-4\" id=\"drawbacks-of-close-ended-mutual-funds\" style=\"color:#023368\">Drawbacks of Close-Ended Mutual Funds&nbsp;&nbsp;<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Before we decide, it\u2019s better to know the <strong>drawbacks of close-ended mutual funds<\/strong> that are given below;&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Drawbacks<\/strong>&nbsp;<\/td><td><strong>Definition<\/strong>&nbsp;<\/td><\/tr><tr><td>Limited Liquidity&nbsp;<\/td><td>Investors can\u2019t redeem their units before the end of the maturity period.&nbsp;<\/td><\/tr><tr><td>Only Lump Sum Option&nbsp;<\/td><td>It offers only Lump sum option, unlike open-ended funds, close-ended funds didn\u2019t offer SIP.&nbsp;<\/td><\/tr><tr><td>Driven by Fund Manager&nbsp;<\/td><td>In open-ended schemes, investors can analyze the performance of a mutual fund scheme in different market situations. This data is available with the scheme, but in closed-ended funds this is not available. &nbsp;&nbsp;<\/td><\/tr><tr><td>Market-driven Prices&nbsp;<\/td><td>If liquidity is low on the stock exchange, you must face challenges while selling units. &nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/open.navia.co.in\/index-navia.php?utm_source=Organic&amp;utm_medium=blog&amp;utm_campaign=blog&amp;utm_content=close_ended_funds_CTA\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"149\" src=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/03\/OPEN-DEMAT-ACC.png\" alt=\"Open a free Navia demat account to invest in close-ended mutual funds\" class=\"wp-image-9412\" style=\"max-width:100%;height:auto\" srcset=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/03\/OPEN-DEMAT-ACC.png 1024w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/03\/OPEN-DEMAT-ACC-300x44.png 300w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/03\/OPEN-DEMAT-ACC-150x22.png 150w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/03\/OPEN-DEMAT-ACC-768x112.png 768w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-5\" id=\"examples-of-close-ended-funds\" style=\"color:#023368\">Examples of Close-Ended Funds<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Some of the <strong>closed-end mutual funds <\/strong>offered in India is given below;&nbsp;<\/p>\n\n\n\n<ul style=\"margin:1em 0;line-height:1.9\">\n<li style=\"margin-bottom:0.8em;line-height:1.8\">ICICI prudential growth fund \u2013 series 2<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Sundaram Long Term Tax Advantage Fund Series III<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">SBI Long Term Advantage Fund Series III<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Reliance FHF XXV Series 15<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Axis Fixed Term Plan \u2013 Series 96<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">These funds offer a fixed maturity period, and the funds are open for subscription only in their NFO periods. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-6\" id=\"conclusion\" style=\"color:#023368\">Conclusion<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">If you are searching for a disciplined and long-term fund, <strong>close-ended <a href=\"https:\/\/navia.co.in\/blog\/category\/mutual-funds\/\">mutual funds<\/a> <\/strong>are ideal for all investors. We have already seen that there are so many benefits like stability and better returns, but they come with some drawbacks like limited liquidity and lump sum option. So, you can choose the fund according to your financial goals and risk appetite. &nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"line-height:1.8;text-align:justify\">Do you want to invest in mutual funds by solving your doubts? <strong><a href=\"https:\/\/navia.co.in\/\">Navia Markets<\/a><\/strong> is here for you to assist in your investment journey. &nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-color has-link-color wp-elements-7\" id=\"key-takeaways\" style=\"color:#ec4d37\">Key Takeaways<\/h3>\n\n\n\n<ul style=\"margin:1em 0;line-height:1.9\">\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Close-ended funds have a fixed maturity, typically 3 to 5 years, and accept money only during the New Fund Offering (NFO) period.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Units cannot be redeemed with the fund house before maturity, but they are listed on stock exchanges for exit.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Types include equity, debt, hybrid and Fixed Maturity Plans (FMPs), the most popular close-end debt fund.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">The locked structure lets fund managers run long-term strategies without worrying about sudden withdrawals.<\/li>\n<li style=\"margin-bottom:0.8em;line-height:1.8\">Main drawbacks are limited liquidity, lump sum only investing with no Systematic Investment Plan (SIP), and thin exchange volumes.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><strong>Do You Find This Interesting?<\/strong><\/p>\n\n\n\n<div class=\"wp-block-group is-nowrap is-layout-flex wp-container-core-group-is-layout-8f761849 wp-block-group-is-layout-flex\">\n<p class=\"wp-block-paragraph\">We\u2019d Love to Hear from you-<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/form.typeform.com\/to\/bpQ8ZlDc\"><img decoding=\"async\" width=\"300\" height=\"64\" src=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/02\/Yes-No-Button-1.png\" alt=\"feedback yes or no button\" class=\"wp-image-8901\" style=\"max-width:100%;height:auto\" srcset=\"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/02\/Yes-No-Button-1.png 300w, https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/02\/Yes-No-Button-1-150x32.png 150w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><\/figure>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-8\" id=\"frequently-asked-questions\" style=\"color:#023368\">Frequently Asked Questions<\/h2>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">What are close-ended mutual funds?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">Close-ended mutual funds are investment schemes with a fixed maturity period and are open for subscription only during their NFO period.&nbsp;<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">How are close-ended funds different from open-ended funds?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">Open-ended funds allow investors to buy or redeem units at any time, while closed-ended funds restrict entry and exit to specific timeframes.&nbsp;<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">Can I redeem my close-ended fund before maturity?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">Not directly with the AMC. However, you can sell your units on a <a href=\"https:\/\/navia.co.in\/blog\/category\/ipo-investments\/\">stock<\/a> exchange where the fund is listed.&nbsp;<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">Do close-ended mutual funds offer SIPs?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">No, they do not allow SIP investments.<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">Is it safe to invest in closed-ended funds?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">They are subject to market risks like any mutual fund. However, fixed maturity and defined investment periods offer some predictability.&nbsp;<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">Do closed-end funds pay dividends?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">Yes, some close-ended funds offer dividend options based on the performance of the underlying assets.&nbsp;<\/p>\n\n<\/details>\n\n\n\n<details class=\"wp-block-details is-layout-flow wp-block-details-is-layout-flow\" style=\"background:#f1f1f1;border-radius:4px;margin-bottom:10px\">\n<summary style=\"font-weight:600;font-size:17px;color:#1a2332;cursor:pointer;padding:16px 20px\">Can close-ended funds outperform open-ended funds?<\/summary>\n\n<p class=\"wp-block-paragraph\" style=\"padding:0 20px 18px 20px;line-height:1.8;color:#333;margin:0\">In certain market conditions and with effective fund management, yes. However, it is not guaranteed.&nbsp;<\/p>\n\n<\/details>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:13px;line-height:1.6;color:#777\"><strong>DISCLAIMER: Investments in the securities market are subject to market risks, read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Brokerage will not exceed the SEBI prescribed limit.<\/strong> Full disclaimer: https:\/\/bit.ly\/naviadisclaimer.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\ud83d\udca1 Quick AnswerA close-ended mutual fund is an investment scheme with a fixed maturity period, typically three to five years, that accepts money only during its New Fund Offering (NFO) period. After the NFO closes, no new investment is accepted and units cannot be redeemed with the fund house, though they are listed on stock [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":10809,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ub_ctt_via":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[209],"tags":[567,524,23,842,305],"class_list":["post-10804","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mutual-funds","tag-close-ended-funds","tag-debt-mutual-funds","tag-mutual-funds","tag-nav","tag-nfo"],"aioseo_notices":[],"featured_image_src":"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/06\/What-are-close-ended-funds.png","author_info":{"display_name":"Navia Markets","author_link":"https:\/\/navia.co.in\/blog\/author\/tradeplusonline\/"},"jetpack_featured_media_url":"https:\/\/navia.co.in\/blog\/wp-content\/uploads\/2025\/06\/What-are-close-ended-funds.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts\/10804","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/comments?post=10804"}],"version-history":[{"count":8,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts\/10804\/revisions"}],"predecessor-version":[{"id":18970,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/posts\/10804\/revisions\/18970"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/media\/10809"}],"wp:attachment":[{"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/media?parent=10804"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/categories?post=10804"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/navia.co.in\/blog\/wp-json\/wp\/v2\/tags?post=10804"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}