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How to invest in close-ended funds

IndianMoney.com Research Team | Updated On Thursday, September 25,2014, 11:09 AM
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How to invest in close-ended funds

Firstly, investors must be comfortable with the illiquidity associated with a close-ended fund. Hence only that portion of the investible surplus which investors can set aside for a longer time frame must be allocated to a close-ended fund.

With no historical performance or other parameters to evaluate the close-ended fund on, the fund house assumes prime significance. Investors must invest their funds in schemes from solid process-driven fund houses. The fund house needs to have clearly defined investment practices and policies; the same can make the fund’s performance largely immune to events like change in fund management.

Finally, investors must be comfortable with the investment proposition offered by the close-ended fund. Unlike an open-ended fund, where investors have the option of easily liquidating their investments, investors in a close-ended fund are required to live with their investments throughout the fund’s tenure.

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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