Examples of this type of fund include unit trusts and open ended investment companies.
The fund is structured so that as investors decide they want to buy the fund it expands to meet their demand by taking their money and investing in more assets. Equally when investors want to sell the fund is able to buy them back, cancel their holding and reduce the underlying asset base accordingly. As such the value of the units cannot vary much from the underlying net asset value. This is different to closed ended funds such as investment trusts where a finite number of shares are traded between investors which can result in them trading at a premium or discount to the underlying assets held by the fund.