Pooled Funds

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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.

INVESTOPEDIA EXPLAINS '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.

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RELATED FAQS
  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. Are so-called self-offering and self-management covered by "Financial Instruments ...

    As the Financial Services Agency (FSA) explains, self-offering of interests in collective investment schemes falls under ... Read Full Answer >>
  5. What happens when I want to sell my A-shares of a mutual fund?

    Typically, commissions or other sales charges may apply when a mutual fund is sold. This is an important factor in deciding ... Read Full Answer >>
  6. What does the information ratio tell about the design of a mutual fund?

    The information ratio can tell an investor how well a mutual fund is designed to deliver excess or abnormal returns as well ... Read Full Answer >>
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