On the basis of Execution and Operation:
Close-ended funds : under this scheme, the corpus of the fund and its duration are prefixed. In other words, the corpus of the fund and he number of units are determined in advance. Once the subscription reaches the pre-determined level, the entry of new investors is closed.
After the expiry of the fixed period, the entire corpus is dis-invested and the proceeds are distributed to the various unit holders in proportion to their holding. Thus, the fund ceases to be a fund, after the final distribution.
Open-ended funds : such a fund is opposite of close-ended fund. Under such a fund type, the size or the time period of the fund is not pre-determined. The investors are free to buy and sell any number of units at any point in time.
Example: The Unit Scheme (1964) of the Unit Trust of India is an open-ended fund.