Definition

A pooled fund is any fund where two or more investors place their money in an investment account to be treated as one investor. A pooled fund can be an investment club, a mutual fund (unit trust), or other investment partnership that has investors contributing money toward the same investment. From the perspective of the entity selling shares or ownership, the money in the pooled fund is viewed as one major investor, as opposed to smaller multiple investors, allowing investors to take advantage of economies of scale.

Investment Club

Investment clubs are created among a group of individuals who meet on a regular basis to review investments and purchase securities based on club voting. Members of investment clubs are required to deposit money on a timely basis (monthly, quarterly or annually) to be pooled as a group investment. Investment clubs are not limited to securities and can also purchase interest in real estate or other private business ventures.

Investment Partnership

As with an investment club, an investment partnership pools money together for a collective investment vehicle. This creates a larger strength for the investors who are able to invest according to the principals of economies of scale where larger dollars hold more weight in market transactions. The investment partnership allows partners to hold different percentages of ownership and can provide restrictions contingent on partners’ needs and objectives. An investment partnership can be a trust, corporation, group of individuals or limited liability company.

Comingled Funds

Resources

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