Which type of mutual fund is known to be open-ended and can issue unlimited shares?

Money market funds are an example of open-ended mutual funds that can issue unlimited shares. The characteristic that defines open-ended mutual funds is their ability to continuously offer shares to investors. Unlike closed-end funds, which have a fixed number of shares, open-ended funds allow investors to buy and sell shares at the fund's current net asset value (NAV) at any time.

This structure provides flexibility for investors as they can enter or exit their investment based on their financial needs. Money market funds, in particular, invest in short-term, low-risk instruments, making them a popular choice for investors seeking liquidity and safety. As these funds receive additional investments, they can issue new shares, leading to potentially unlimited growth in the number of shares offered. This feature is appealing for investors looking for an easily accessible place to park their cash.

Other types of funds, such as equity, bond, or index funds, can also be open-ended, but the focus here is specifically on money market funds, which embody the open-ended nature and share issuance capabilities being discussed.