closed-end investment company
- noun
- /kloʊzd ɛnd ɪnˈvɛstmənt ˈkʌmpəni/
- Specialized
:
sociedad de inversión cerrada
- Investors may choose a closed-end investment company for exposure to diverse asset classes.
Examples
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A closed-end investment company typically has its shares traded on major stock exchanges.
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The closed-end investment company reported significant gains this quarter.
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Unlike mutual funds, a closed-end investment company does not issue new shares after its initial offering.
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How does a closed-end investment company differ from a mutual fund?
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The closed-end investment company raised funds by issuing a limited number of shares that investors could buy on the stock exchange.
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Many investors prefer a closed-end investment company because it provides a stable number of shares for trading.
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Investing in a closed-end investment company allows shareholders to benefit from periodic dividends distributed from its earnings.
Synonyms
1
7.2
A company that sells a set number of shares that trade on the stock market
How Liquid
- Specialized
- Specialized
Surface Forms
Morphology
closed-end + investment + company
While 'investment company' is transparent, the modifier 'closed-end' is a technical compound; a B1 learner who knows 'closed' and 'end' can infer the company is in some way restricted or not open-ended, but they are unlikely to derive the precise financial sense (a fixed number of shares traded on an exchange) without prior exposure. The meaning is partially guessable from the parts but requires domain knowledge to be fully understood.
Etymology
Closed-end investment company gets its name from the idea of a closed-end fund — imagine a shop that sells a fixed number of boxes and then shuts its doors to new buyers. So it means a type of investment company that issues a 'fixed number' of shares which are then bought and sold on the stock market.