Retail Fund

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DEFINITION of 'Retail Fund'

A type of fund that is registered with the Securities and Exchange Commission (SEC) and is sold to individual investors through investment dealers and in open market transactions. Retail funds are often categorized as mutual funds, and carry lower initial investments and management expense ratios than non-retail funds.

BREAKING DOWN 'Retail Fund'

Because retail funds are registered with the SEC, they are restricted in the amount of overall risk they can expose themselves to, such as option trading and short selling. These risks are considered as such due to the nature of their volatility and speculative nature.

If you compare retail funds to non-retail hedge funds, you will notice that non-retail hedge funds typically require larger initial investments and are marketed privately to high net worth clients.

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RELATED FAQS
  1. How do dividends affect net asset value (NAV) in mutual funds?

    Distribution of dividends reduces the net asset value (NAV) of mutual fund shares. However, this doesn't mean that fund investors ... Read Full Answer >>
  2. Are mutual funds considered retirement accounts?

    Unlike a 401(k) or Individual Retirement Account (IRA), mutual funds are not classified as retirement accounts. Employers ... Read Full Answer >>
  3. Do mutual funds invest only in stocks?

    Mutual funds invest in stocks, but certain types also invest in government and corporate bonds. Stocks are subject to the ... Read Full Answer >>
  4. Why are mutual funds not FDIC-insured?

    Mutual funds are not Federal Deposit Insurance Corporation (FDIC)-insured because money invested in funds are not considered ... Read Full Answer >>
  5. Can mutual funds invest in commodities?

    Mutual funds can invest in commodities. In fact, mutual funds may provide a better way for investors to gain exposure to ... Read Full Answer >>
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    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>

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