Open-ended mutual funds – Know before you opt

Mutual Funds are classified on various parameters such as the nature of investments, tenure of investments, the risk profile, and even the time of closure. As far as the last parameter is concerned, mutual funds are of two types – open-ended mutual funds and close-ended funds. The one you would want to choose will depend on your goals and risk appetite. Do you prefer a fund that offers more liquidity? Do you wish to invest a lump sum amount or through systematic investment plans? Do you have a specific investment horizon in mind? You can select a close-ended or an open-ended fund based on the answers to some of these questions.

But how do close-ended and open-ended mutual funds work? Read on to find out.


Helpful information for investors: All Mutual Fund investors have to go through a one-time KYC (know your Customer) process. Investors should deal only with registered mutual funds, to be verified on SEBI website under ‘Intermediaries/ Market Infrastructure Institutions’. For redressal of your complaints, you may please visit . For more info on KYC, change in various details & redressal of complaints, visit This is an investor education and awareness initiative by Nippon India Mutual Fund.

The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The document has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. The sponsor, the Investment Manager, the Trustee or any of their directors, employees, associates or representatives (“entities & their associates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Entities & their associates including persons involved in the preparation or issuance of this material shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material. Recipient alone shall be fully responsible for any decision taken on the basis of this document.