Which of the following best describes closed-end funds?

Closed-end funds are investment vehicles that have a fixed number of shares issued at their inception and are traded on the stock exchange like stocks. This unique characteristic means that once the fund has been established and shares are sold, the total number of shares does not change, allowing for a diversified portfolio that can invest across various asset classes. The share price is determined by market demand and supply, which can lead to trading at a premium or discount to the fund's net asset value (NAV).

This structure allows investors to benefit from diversification while also having the potential for price appreciation in a way that is different from open-end funds, which continuously issue and redeem shares based on investor demand. The fixed share issuance aspect of closed-end funds contributes to their unique market positioning and trading characteristics, making this option the best description among the choices provided.