Final answer:
Different funds trade differently on the secondary market: closed-end funds and ETFs trade like stocks, while mutual funds do not trade on the secondary market and UITs trade but less frequently than ETFs or closed-end funds.
Step-by-step explanation:
When it comes to trading on the secondary market, different types of funds have distinct characteristics. Closed-end funds are traded like stocks, with their price being determined by market demand and supply, and they can be purchased or sold throughout the trading day on stock exchanges. Exchange-Traded Funds (ETFs) also trade on stock exchanges and can be bought and sold in a similar manner to stocks, offering real-time pricing and the flexibility of intraday trading.
Mutual funds, on the other hand, are not traded on the secondary market. Instead, shares are purchased from and sold back to the mutual fund company based on the fund's net asset value (NAV), which is calculated at the end of each trading day. Mutual funds can be focused on specific areas, such as Indonesian company stocks, large manufacturing company bonds, or biotechnology stocks, or they can be broad-based index funds designed to mimic the market's overall performance.
Finally, Unit Investment Trusts (UITs) trade on the secondary market but not as frequently as ETFs or closed-end funds. UITs can be sold back to the issuer or to other investors in the marketplace, but their market isn't as liquid as that of ETFs or closed-end funds.