Why a buzzy fund that advertised stakes in hot -2-

Destiny Tech100 is a closed-end fund. Unlike an exchange-traded fund or a traditional mutual fund that continuously issues and redeems shares, a closed-end fund issues a fixed number of shares at its initial public offering to raise capital that is plowed into its investments. After that, the number of shares mostly stays the same. Investors can buy and sell shares of the fund on the stock market, but new money typically does not flow into the underlying investments. In other words, when investors trade Destiny Tech100, they are trading the fund's shares with each other, not directly investing in private companies such as SpaceX or Anthropic. Closed-end funds often trade at a discount to their net asset value, or NAV, reflecting, among other factors, the value of their holdings minus the cost of operating the fund. But Destiny Tech100 only computes its NAV quarterly, which means investors will not get an update on its fair value until the end of its fiscal second quarter. Destiny Tech100 had a NAV of $24.56 a share as of March 31, while its market capitalization stood at over $1 billion, or $71.24 per share, as of Monday afternoon, before pulling back on Tuesday, according to FactSet data. That one-time 190% premium to its NAV is a reminder for investors that the price of the closed-end fund can "deviate significantly" from the actual value, said Neena Mishra, director of ETF research at Zacks Investment Research. "There is a lot of opacity" for funds like Destiny Tech100 or Fundrise Innovation Fund VCX, "so there's a total lack of transparency and they are very expensive," Mishra told MarketWatch via phone on Tuesday. "Investors tend to pile in when the hype surges, so probably many end up losing money in these hard and volatile securities." Prasad, Destiny Tech100 and Anthropic did not immediately respond to MarketWatch's requests for comment. Read more: The 'DRAM' memory ETF has gotten off to a blazing start. Here comes a leveraged version. -William Gavin -Isabel Wang This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 05-13-26 1223ET