A mutual fund that invests predominantly or exclusively on the receivables from lease agreements. Because there is little or no secondary market for leases, the fund must directly purchase the leases in the fund. A lease fund operates much like a bond fund, but with shorter maturities for the underlying assets.
An investment company that invests the shareholders' money in lease obligations. A lease fund is very similar to a bond fund except that the maturities of its investments are shorter. Because leases do not have an active secondary market, the fund manager must secure outside agreements to buy the leases in case the shareholders redeem their shares.