Frequently asked question
What is the difference between a mutual fund and a private fund?
Fund Formation
Investor-initiated redemption rights are a central distinction. Open-ended mutual funds issue interests redeemable or repurchasable at the investor’s option, subject to their terms. Closed-ended private funds generally return capital through distributions rather than investor-initiated redemption. An open-ended fund can still have lock-ups, gates and notice periods. The full statutory definitions, management arrangements and exclusions determine whether and how either Act applies.
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Related definition: Mutual Fund.