An open-end scheme (or open-ended fund) is a mutual fund that does not have a fixed number of units in circulation. Investors can purchase and redeem units at any time at the prevailing NAV, with the fund house issuing new units to meet incoming investments and cancelling units upon redemption. This continuous buy-sell mechanism makes open-end schemes highly liquid relative to closed-end funds or FMPs. In India, the vast majority of mutual fund assets are held in open-ended schemes across equity, debt, and hybrid categories. The daily NAV computation and the flexibility to invest or exit at any time make open-end schemes the preferred choice for retail investors.
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