When you think of investing, you might think of mutual funds. To buy into a mutual, you buy shares (often through a broker) directly from the funds itself. Then, when you want to take your money out (to pay for liposuction or whatever), you sell the shares back to the fund.
So the money train only has two stops: you and the fund. There is no secondary market for these investments. You can't take your mutual fund shares and sell them on an exchange (or trade them to your brother-in-law in order to get his Mustang).
Closed-end funds are different. They issue a finite number of shares, which then trade in a secondary market. You don't buy from the fund (unless you purchase the shares in the IPO). Instead, you pick up shares being sold by other investors.
Interval funds kind of split the difference between mutual funds and closed-end funds. They're classified as closed-end funds, as far as the SEC is concerned. However, unlike your run-of-the-mill closed-ender, shares of an interval fund don't trade on a secondary market.
Instead, in order to get cash back for your shares, the fund runs periodic repurchase offers. That is, at intervals (hence the name), the fund will open the door for you to return your shares to them in exchange for cash. (Often, the "interval" part is really just academic, with the fund continuously offering repurchases.)
The price of repurchases for any interval fund is based on the net asset value of the fund at the time of the buyback.
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![Finance: What Are ETFs?](https://media1.shmoop.com/video/thumbnails/COURSE.FINANCE.015_770x433.jpg)
Finance: What Are ETFs?275 Views
Finance allah shmoop shmoop what are efs Well first this
is the random financial terms you want to be asked
in the financial term spelling bee and second you should
know that e t f stands for exchange traded fund
f's are kissing cousins of index funds with one key
subtle but important difference f don't change at least generally
speaking an index fund might reflect the transportation industry and
have so much exposure to ford gm united airlines tesla
etcetera But it's required tohave say sixty five percent of
its exposure to companies based in the united states in
its charter every month that index fund has to re
balanced that exposure So if the auto companies do very
poorly in a given month index fund has to re
balance by buying mohr shares of those auto companies to
make up the difference you know given that they've performed
poorly relative toa airlines trucking company's railroads jeff howard segways
and so on But in a t f the fund
is basically set once and the shares just really kind
of float if over a decade the auto companies do
really well then in an e t f the auto
companies will just have a dominant influence on the overall
performance of the fund The management company doesn't have to
buy and sell shares regularly in an e t f
till fulfill the legal promises it agreed to at the
outset of the fund in the way in index fund
re balances its shares by buying and selling them So
what does that mean to you Well it means that
fc may drift in given directions like this guy For
example a generic technology e t f might have had
a total exposure of say five percent to internet stocks
in the beginning of nineteen ninety seven but amazon ebay
yahoo netflix and a well performed massively better than the
broader technology market which did well but just not omg
dot com well so that five percent waiting twenty years
later might be more like fifty percent or mohr of
that particular e t f but one other key aspect
of it is that it's traded like a stock i
e in one block and trade throughout the day there's
a bid and an ask price The bids are all
added up and shares in the fund can be bought
And sold at any time throughout the day Although the
market sets the price of an f just like it
does on a stock Well there now you're all ready
for the financial term spelling bee And they might also
ask you to spell lipo Yeah you might want to 00:02:33.69 --> [endTime] write that one on your arm
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