Page "Closed-end fund" Paragraph 5
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Like their better-known open-ended cousins, closed-end funds are usually sponsored by a fund management company which will control how the fund is invested.
They begin by soliciting money from investors in an initial offering, which may be public or limited.
The investors are given shares corresponding to their initial investment.
The fund managers pool the money and purchase securities or other assets.
What exactly the fund manager can invest in depends on the fund's charter, prospectus and the applicable government regulations.
Some funds invest in stocks, others in bonds, and some in very specific things ( for instance, tax-exempt bonds issued by the state of Florida in the USA ).
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