Editing Closed-end fund (section)

==Comparison to exchange-traded funds (ETFs)==
Closed-end funds are traded on exchanges, and in that respect they are like [[exchange-traded fund]]s (ETFs), but there are important differences between these two kinds of security. The price of a closed-end fund's shares is completely determined by investor demand, and this price often diverges substantially from the NAV of the fund assets. In contrast, the market price of an ETF trades in a narrow range very close to its net asset value, because the structure of ETFs allows major market participants to redeem shares of an ETF for a "basket" of the fund's underlying assets.<ref>{{Cite news|url=http://www.investopedia.com/ask/answers/052815/what-difference-between-etfs-net-asset-value-nav-and-its-market-price.asp|title=What is the difference between an ETF's net asset value (NAV) and its market price?|last=Investopedia|date=2015-05-28|newspaper=Investopedia|language=en-US|access-date=2016-12-10}}</ref> This feature could in theory lead to potential [[arbitrage]] profits if the market price of the ETF were to diverge substantially from its NAV. The market prices of closed-end funds are often 10% to 20% higher or lower than their NAV, while the market price of an ETF is typically within 1% of its NAV. Since the market downturn of late 2008, a number of fixed income ETFs have traded at premiums of roughly 2% to 3% above their NAV.