There are two basic types of mutual funds open-ended and closed-end. The important points of parity and difference between these two are as follows:

Collect Money: Open-ended funds collect money from investors on an on-going basis. This means that whenever a new investor is willing to invest in a fund, an open-ended fund will create new units and give it to the investor in return for cash. Hence you are dealing with the funds and the numbers of units that can be created are virtually unlimited.

On the other hand, a closed-end fund collects funds from investors only at the beginning and pays back the money only at the end of the fund