Pooled Funds


DEFINITION of 'Pooled Funds'

Funds from many individual investors that are aggregated for the purposes of investment, as in the case of a mutual or pension fund. Investors in pooled fund investments benefit from economies of scale, which allow for lower trading costs per dollar of investment, diversification and professional money management.

BREAKING DOWN 'Pooled Funds'

The enormous advantages of investing in pooled fund vehicles make them an ideal asset for many investors. There are added costs involved in the form of management fees, but these fees have been steadily declining for many years as competition has increased. The main detractor of pooled fund investments is that capital gains are spread evenly among all investors - sometimes at the expense of new shareholders.

  1. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased ...
  2. Confusion Of Goods

    A legal term for when the goods or property of two or more parties ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments ...
  4. Asset Allocation

    An investment strategy that aims to balance risk and reward by ...
  5. Commingled Fund

    A fund consisting of assets from several accounts that are blended ...
  6. Fund Manager

    The person(s) resposible for implementing a fund's investing ...
Related Articles
  1. Retirement

    A Brief History Of The Mutual Fund

    This popular investment vehicle has seen its share of ups and downs, successes and scandals. Read all about it!
  2. Retirement

    Lump Sum Versus Regular Pension Payments

    If you're about to retire, you may be facing this dilemma soon. Find out what your options are.
  3. Mutual Funds & ETFs

    Mutual Fund Basics Tutorial

    Learn about the basics - and the pitfalls - of investing in mutual funds.
  4. Investing

    2 Common Ways to Misuse Target Date Funds

    The world of asset classes is just as complicated as taking vitamins. How much should you take of small caps? Intermediate bonds? Emerging market stocks?
  5. Mutual Funds & ETFs

    What Target-Date Funds Can Teach About Investing

    Target-date funds are a popular way to invest for retirement. Here's what they can teach the novice investor.
  6. Fundamental Analysis

    The Basics Of Corporate Structure

    CEOs, CFOs, presidents and vice presidents: learn how to tell the difference.
  7. Investing

    The ABCs of Bond ETF Distributions

    How do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
  8. Mutual Funds & ETFs

    4 Mutual Funds Warren Buffet Would Buy

    Learn about four mutual funds Warren Buffett would invest and recommend to his trustee, and discover detailed analysis of these mutual funds.
  9. Mutual Funds & ETFs

    Passively Managed Vs. Actively Managed Mutual Funds: Which is Better?

    Learn about the differences between actively and passively managed mutual funds, and for which types of investors each management style is best suited.
  10. Professionals

    How to Navigate Taxable Mutual Fund Distributions

    It's almost time for year-end capital gains distributions for mutual funds. Here's how to monitor them and minimize their tax impact.
  1. What is the difference between exchange traded funds (ETFs) and closed end funds?

    Investors have a number of options available to them when it comes to investing in pooled funds. While mutual funds offer ... Read Full Answer >>
  2. How do I calculate the loan-to-value ratio using Excel?

    Investors have a variety of pooled fund investment options, including mutual funds and money market funds, that can meet ... Read Full Answer >>
  3. How do you calculate the cost basis for a mutual fund over an extended time period?

    Investors must pay taxes on any investment gains they realize. Subsequently, any capital gain realized by an investor over ... Read Full Answer >>
  4. Can mutual funds only hold stocks?

    There are some types of mutual funds, called stock funds or equity funds, which hold only stocks. However, there are a number ... Read Full Answer >>
  5. How do mutual funds compound interest?

    The magic of compound interest can be summed up as the concept of interest making interest. On the other hand, simple interest ... Read Full Answer >>
  6. Do mutual funds pay interest?

    Some mutual funds pay interest, though it depends on the types of assets held in the funds' portfolios. Specifically, bond ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  2. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  3. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  4. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  5. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  6. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!