What is a Pooled Fund?
Pooled funds are funds that involve multiple investors who contribute assets and hold them jointly as a group. In a sense, a pooled fund is similar to that of a mutual fund, in that the assets contained in the fund are managed as a single unit. Sometimes referred to as a commingled fund, the pooled fund is an effective means of structuring pension funds and other types of employee investing programs.
A pooled fund is the grouping of investment savings that belong to many individuals who share the same investment goals. A pooled fund is typically invested by an investment management firm in a well-diversified portfolio of securities according to specific goals set out in the offering memorandum. Each investor, or unitholder, owns a share of the fund’s total assets (represented by units). Investment earnings are generated when the securities held in the fund pay dividends or interest income. In addition, as the values of the securities in the fund rise or fall, each investor’s ‘unit price’ or value will change as well. Pooled funds provide a number of benefits for investors including professional management, diversification, convenience and liquidity for easy access and withdrawal.
