Closed-end funds (CEFs) are a type of managed investment fund that raises a fixed amount of capital through an initial public offering (IPO) and then proceeds to invest this capital in a diversified portfolio of securities, such as stocks, bonds, or other assets. Unlike open-end funds, where shares can be created or redeemed based on demand, closed-end funds have a set number of shares that trade on secondary markets, which can lead to price fluctuations based on supply and demand rather than underlying asset value. Investors buy and sell shares of closed-end funds on stock exchanges, and these funds may trade at a premium or discount to their net asset value (NAV).