What Is a Commingled Fund?

A commin🍰gled fund is a fund that consists of a☂ portfolio of assets from various accounts that are blended together. Commingled funds exist to reduce the costs of managing the constituent accounts separately.

Commingled 🌳funds, also referred to🌌 as institutional funds, are a type of pooled fund that is not publicly listed or available to individual retail investors. Instead, these are used by closed retirement plans, pension funds, insurance policies, and other institutional accounts.

Understanding a Commingled Fund

Commingling involves the combining of assets of different investors into a single fund or investment vehicle. Commingling is a primary feature of most 澳洲幸运5开奖号码历史查询:investment funds. It may also be used to combine various types of contributions for various🌜 purposes

In some ways, commingled funds are similar to 澳洲幸运5开奖号码历史查询:mutual funds. Both 🍸are professionally managed by one or more fund managers and can invest in basic financial instruments such as stocks, bonds, o𝄹r a combination of both.

Also, like mutual funds, commingled fund investments benefit from economies of scale, which allow for lower trading costs per dollar of investment, and 澳洲幸运5开奖号码历史查询:diversification, which lowers portfolio risk.

In other ways, commingled funds are different from mutual funds. There's no 12(b)-1 marketing fee and often lower administration fees, because they're not publicly marketed and the reporting requirements are different.

Oversight

Commingled funds are not regulated by the 澳洲幸运5开奖号码历史查询:Securities and Exchange Commission (SE🍸C), which means they are not required to submit a variety of lengthy disclosures. Mutual funds, on the other hand, must register with the SEC and abide by the 澳洲幸运5开奖号码历史查询:Investment Company Act of 1940.

Commingled funds are not completely devoid of oversight, though: They are subject to review by the United States 澳洲幸运5开奖号码历史查询:👍Office of ဣthe Comptroller of the Currency, as well as individual state regulators.

While mutual funds offer a 澳洲幸运5开奖号码历史查询:prospectus, commingled funds offer a Summary Plan Description (SPD). SPDs can offer more detail, describing the fund's objectives, investment strategy, and background of its managers. It also d🌠escribes the rights and obligations of the plan participants and beneficiaries. Any participant in a plan o𓄧ffering a commingled fund should read the SPD carefully.

Advantages and D🐎isadvantages of Commingled Funds

Advantage

Less regulation can result in fewer legal expenses and operating costs for a commingled fund. The lower the costs, the less drag on a fund's returns. If a commingled fund and a comparable mutual fund post the exact same gross performance, the commingled fund's net return would likely be better because its expenses were lower than the mutual fund's.

Disadvantage

A disadvantage of commingled funds is that they do not have ticker symbols and are not publicly traded. This lack of public information can make it difficult for outside investors to track the fund's capital gains, dividends, and interest income. With 🎉p🉐ublicly traded mutual funds, this information is required to be transparent.

Example of a Commingled Fund

The Fidelity Contrafund Commingled Pool is available to companies with qualified employee benefit plans.

Like a mutual fund, it has a portfolio manager and publicly discloses pertinent information via quarterly reports. It focuses on large-cap growth stocks, with major weightings in information technology, communication services, consumer discretionary, financial companies, and health care. Unlike a mutual fund, it isn't available to the public at large.

The Contrafund Commingled Pool has a 0.43% 澳洲幸运5开奖号码历史查询:expense ratio. Since its inception in 2014, the fund has delivered an annualized return of 14.69%, versus the 12.96% produced by the S&P 500 index.

Special Considerations

Illegal Commingling

In some cases, the commingling of funds may be illegal. This usually occurs when an investment manager combines client money with their own or their firm's, in violation of a contract.

Details of an 澳洲幸运5开奖号码历史查询:asset management agreement are typically outlined in an investment management contract. An investment manager has a fiduciary responsibility to mana✤ge assets according to certain specifications and standards. Assets agreed to be managed as separate cannot be commingled by the investment advisor.

Other legal situations may also arise where contributions provided by a client must be managed with special care. This can ൲occur in legal cases, corporate client accounts, and real estate tran🐠sactions.

The Bottom Line

A commingled fund is money pooled from various institutional investors that is managed by investment professionals. It isn't regulated by the SEC. Generally, it is an investment opportunity not available to the general public, except through their employer's workplace retirement plan.

Some administrative expen💖se🥀s can be lower than those of mutual funds due to its simpler reporting and disclosure requirements and the lack of need for marketing.