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.