Open-ended Mutual Fund

• The fund manager registers their fund to the SEC
• The fund manager markets the funds to bring in more investors/shareholders
• Shareholders can buy and sell shares directly with the fund manager
• The fund manager takes 1% of total earnings as management fees
• * The fund manager has to keep some money on-hand if the shareholders want to sell their shares back (i.e. if the portfolio is at a decline)
• Shareholders can only buy or sell at the end of the day

Closed-end Mutual Fund

• The fund manager still registers their fund to the SEC, just like open-ended mutual funds
• The fund manager markets only in the beginning, when the shares are still available for sale. Once all shares are bought, the fund becomes closed, since the maximum number of shares are fixed in size. Therefore, there is no point to market anymore after it becomes closed.
• Shareholders will not buy and sell shares through the fund manager. Instead, they buy and sell from the secondary market or the open market.
• The fund manager could still take about 1% of total earnings for management fees, no change from open-ended mutual funds
• The fund manager doesn't need to keep money on-hand. The fund manager isn't involved with the buying/selling anymore (the secondary market does that)
• Shareholders can buy or sell throughout the whole day because they are now dealing with the secondary market, or the stock exchange, where stock prices fluctuate throughout the day.

ETF

• The fund manager registers their fund to SEC, just like the mutual funds
• ETF is the best of both worlds (open-ended mutual funds, closed-end mutual funds)
  • New shares: New shares can be bought, unlike closed-end mutual funds
  • Buyable at any time: The shares can be bought throughout the market open/end hours since they are on the stock exchange, just like closed-end mutual funds
• ETF is less actively managed. They usually base their portfolio on things like S&P 500, or things like gold.
  • Therefore, usually lower fees than mutual funds
• In ETF, the shares can only be bought by approved people (usually big corps or institutions)
• The big shareholders then put up the stocks on the secondary market or stock exchange. Just like closed-end mutual funds, you can buy or sell throughout the whole day. If you want your investments cashed out ASAP, ETF can do just that.