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Most of the mutual funds are open-ended. Open-ended mutual funds are much more common than closed-ended funds. The fund does not have a set number of shares that’s why it is called Open-ended mutual fund. This fund allows the investors to directly purchase and sell shares at any time. Fund issues new shares to investors based upon the current net asset value and redeem the shares when the investor decides to sell.

Open-ended mutual fund is highly liquid as investors can put their money into and take it out whenever they want. Total assets of fund go up and down as the money flows in and out. There's no limit to the number of shares the fund can issue and value of individual share is not affected by shares outstanding. The price of each share is based on fund’s net asset value. Net asset value is calculated by change in prices of the stocks or bonds of the fund.

Open-ended funds offer various benefits to investors. These funds are extremely flexible; you can get your money back at any time when you desire. Your funds are diversified among different types of investment opportunities. This way you can reap the fruits of different investment options.

Most of open mutual funds allow transferring among various funds of the same family without charging any fees. Open-ended mutual fund also suffers from some serious risks. Sudden redemptions lead to a fall in the portfolio value thus it affect your returns. Various market forces also affect the returns of the fund. Open funds are not traded in stock market. You can purchase the shares through a representative or if you have an account with the investment firm, you can buy online.