A close-ended fund is a form of pooled investment product, which raises the money through an IPO, when its units are issued, after which the units get listed on an exchange for buying and selling on the secondary market.
There are no close-ended MFs in India.
Investors don’t interact with the fund house of a close-ended fund after the subscription window is shut. Whereas, in open-ended funds, investors transact with the AMC and not with the exchange.
Close-ended funds’ advantages include letting the fund house deploy the fund optimally without having to worry about redemption requests from investors, who transact on the exchange instead. It is easier for investors to trade in as well, as they do it on the exchange.