Closed End Funds Increasing in Number and Value

June 29
12:17 PM 2013

The sales for new closed-end funds have been increasing as of late and is now on pace to hit its highest levels since the 2008 recession. According to a report from Cerulli Associates released last Friday, it is double the level from last year.

These new closed end funds have raised about US$10.5 billion from initial public offerings between January and May according to the Boston based research firm. Back in 2012, the funds raised a total of US$11.3 billion in overall sales.

The thirteen closed end funds that have been launched for this year have lifted the industry to a market size worth US$288 billion, which is quite small compared to the US$13 trillion for open ended mutual funds as indicated in Thomson Reuters data.

In 2012, 24 closed ends funds were opened, which is the highest since 2007 where a total of 41 were launched. This was confirmed by Morningstar, the Chicago, IL based research firm.

Closed end funds generate money during the IPO and then invest these funds in a portfolio of securities. These portfolios are then actively managed and trade on exchanges but do not allow new contributions until they are opened.

© 2022 VCPOST, All rights reserved. Do not reproduce without permission.


Join the Conversation

Subscribe to VCpost newsletter

Sign up for our Deals of the Day newsletter.
We will not spam you!

Real Time Analytics