I was reading the ISO 10962 (the 2015 version) which classifies financial instruments.
In the Collective Invesment Vehicle (CIVs) they separe them in:
- Standard Funds
- Hedge Funds
- Pension Funds
- Fund of Funds
- Private Equity Fund
In the fourth attribute of each one of that CIVs is "Security type and investors restrictions" and the possible values are:
Question: What is the difference between both?
Mutual fund units, or shares, can typically be purchased or redeemed as needed at the fund's current net asset value (NAV) per share, which is sometimes expressed as NAVPS. A fund's NAV is derived by dividing the total value of the securities in the portfolio by the total amount of shares outstanding.
An open-end fund is equitably divided into shares which vary in price in direct proportion to the variation in value of the fund's net asset value. Each time money is invested, new shares or units are created to match the prevailing share price; each time shares are redeemed, the assets sold match the prevailing share price. In this way there is no supply or demand created for shares and they remain a direct reflection of the underlying assets.
Many collective investment vehicles split the fund into multiple classes of shares or units. The underlying assets of each class are effectively pooled for the purposes of investment management, but classes typically differ in the fees and expenses paid out of the fund's assets.