RWA FOUNDATION
Open vs Closed-End
Two fund structures, two ways out
An open-end fund issues new shares when investors subscribe and redeems shares when they leave. A closed-end fund generally does not redeem on demand, so investors usually exit by selling to someone else. The fund's assets usually decide which structure makes sense.
HOW AN OPEN-END FUND WORKS
Shares are issued and redeemed at net asset value, typically every business day. Money market and Treasury funds work this way because their assets are easy to sell.
HOW A CLOSED-END FUND WORKS
Shares are not redeemed on demand. Some closed-end funds have a fixed term and a single raise; others raise more over time or offer periodic repurchases, as interval and tender-offer funds do. Private credit and property often use these structures.
WHAT THE TOKEN CHANGES
A token can make closed-end shares easier to transfer without making them redeemable. Unless the fund offers a repurchase, you exit by selling to another buyer.
Open-end funds redeem on request. Closed-end funds generally don't. A token does not change which one you hold.