Open Ended Mutual Funds Redemptions
This video by Khan Academy explains the concept of open-ended mutual funds in more detail. It explains how NAV is calculated and how new shares are issued and how the mutual fund company redeems the shares. An open-ended fund can keep creating new shares as well as redeeming shares. This creates a problem for the fund managers as they always need to keep some money in very liquid assets so that they can service the redemtion requests.