Open-ended mutual fund
A fund whose unit can be bought from and redeemed with the management company on any working day at the calculated value, without having to find a buyer on an exchange.
How to read the number
The price of the transaction becomes known after the fund's assets are valued for the day rather than when the order is placed: there is nobody to trade against intraday, and no reason to.
When the metric lies
Redemptions are paid for by selling the fund's own assets. In a mass outflow the selling has to happen at the worst moment, and the cost of it falls on the unitholders who stayed.
Also known as: open-ended unit fund