Open-end funds, closed-end funds, and UIT structures relevant to Series 6 product coverage.
This section gives the structural vocabulary for the rest of Chapter 4. Before a candidate can reason through pricing, suitability, or customer disclosures, the candidate needs to know what kind of investment company is in the fact pattern and how that structure affects ownership, pricing, and market behavior.
| Product type | Core structure | Pricing behavior | Exam-useful clue |
|---|---|---|---|
| open-end fund | continuously issues and redeems shares | bought and redeemed at NAV-related pricing | mutual fund language, sales charges, share classes |
| closed-end fund | fixed share issuance after offering | trades in the market at premium or discount to NAV | exchange-traded fund shares with market pricing |
| UIT | fixed portfolio with limited active management | sold as redeemable units | trust language, fixed basket, little portfolio turnover |
Series 6 often turns this into a recognition problem. If the shares trade on an exchange, the product is not behaving like an open-end mutual fund. If the portfolio is essentially fixed and trust-based, the product is moving toward UIT logic rather than active fund-management logic.