Although closed-end funds are scarce in Asia - there are only 17 listed on the Hong Kong stock exchange, compared with over 1,900 mutual funds, they hold distinct advantages for investors in volatile times. Many large mutual fund houses closed trading temporarily in all of their funds following the US attacks, despite the fact that for some, the majority exposure was in Europe and Asia, where markets were still open.

The liquidity of a closed-end fund, however, comes from the market rather than from a fund company, so theoretically, as long as the exchange is open and the underlying fund assets are tradable, closed end fund shares can be traded as easily as stocks. With closed-end funds, it is also sometimes possible to make a profit not only on the increase in the value of the underlying portfolio, but also on the price of the fund's shares, which as there are only a certain number issued, can rise with investor sentiment and demand.

However, there are also risks which investors must be aware of, say experts. Closed end funds tend to be less liquid than their mutual fund counterparts, and operating expenses are often higher. 'Closed-end funds are a lot more expensive than mutual funds,' Towry Law senior asset management executive David Chapman warned in the Wall Street Journal. 'The bid-offer spread can be as wide as 10% at times, particularly in an illiquid market.'