ShmoopTube

00:00

Finance a la shmoop what is a closed-end fund? well it's a type of mutual fund [Man approaches mutual fund desk]

00:08

only like a bank at any convenient time it's closed

00:13

like its assets are enclosed in its price closed means that the fund itself

00:18

doesn't actively trade assets back and forth inside of it on a daily basis like

00:24

the most famous closed-end mutual fund in the world is Berkshire Hathaway [Man pushing pram of a baby with Berkshire Hathaway briefcase for a head]

00:29

Warren Buffett's you know other child the successful one it owns 40 or 50 key

00:34

assets from Geico to train companies to metal machinery firms in Israel to

00:41

boatloads of shares of stocks like coca-cola and Gillette and Wells Fargo

00:45

all of those assets are wrapped up in a tidy BRK bow and the stock market values [Stock market values appear]

00:53

ticker BRK daily by trading it back and forth among investors so yes the assets

00:59

inside of the fund do change but in an analogous mutual fund that is open the

01:05

value placed on the shares is at what is called net asset value, that value is

01:10

calculated by just adding up the 843 stocks at the mutual fund owns or however

01:16

many the number is and then just calculating a value based on the number [Calculation appears]

01:20

of share units comprising that open end mutual fund the closed-end fund has no

01:25

changes that way it's just investors valuing the whole bucket of investments

01:30

in one closed number now if you'll excuse us we have to get back to [Baby crying in a crib with Berkshire Hathaway briefcase for head]

01:35

babysitting for Warren Buffett isn't she just an angel

Full Transcript