Commingled Fund

commingled fund

An investment fund that consists of assets of several individual accounts. A commingled fund is established to reduce the cost and effort required to manage accounts separately.

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Commingled Fund

1. A mutual fund in which money from several customers is pooled together to reduce risk and cost. Any fund investing a large amount of money is subject to a lower percentage of brokerage fees, and large accounts usually have smaller administrative costs than individual accounts. They also benefit from economies of scale, mitigating risk. However, capital gains in a commingled fund are distributed equally among investors, usually resulting in a smaller return.

2. A normally illegal practice in which a broker mingles his own funds with those of his/her client, making it difficult to distinguish to whom to give returns.