Build a Better Process

Pooled Investment Definition and Quiz

By joining together, investors can afford professional management at a cost they wouldn't be able to afford themselves.
  1. Define - Define pooled investment.
  2. Context - Use pooled investment in a sentence.
  3. Quiz - Test yourself.
face pic by Paul Alan Davis, CFA
Updated: February 18, 2021
Economies of scale is a wonderful benefit for the small investor and large investor alike. Learn more below.

Outline Back Tip Next

/ factorpad.com / fin / glossary / pooled-investment.html

An ad-free and cookie-free website.

What is a Pooled Investment Fund?


Pooled Investment is an investment where monies are pooled and managed as one portfolio with one set of objectives. This offers economies of scale to investors because costs associated with managing and administering the pool are spread across all investors. Examples include mutual funds, hedge funds and pension funds.

Synonym: pooled fund

For context, many investors don't realize how profilic pooled investments are in the financial markets. Many mortgages for example are pooled into GNMA mutual funds. Money market instruments at brokerage firms are pooled investment vehicles as well. They have a share prices of 1.00 typically and own short maturity bonds and commercial paper.

Pooled investments are required to provide disclosures in what is called a prospectus, which spells out the investment objective, fees, management team, custody, comparison benchmark and risks of the pooled investment vehicle.

In a Sentence

Doc:  A pooled investment provides economies of scale and professional management.
Lia:  Why then is the media so focused on individual securities?


Many terms have 4-5 minute videos showing a derivation and explanation. If this term had one, it would appear here.

Videos can also be accessed from the YouTube YouTube Channel.

Video Script

If this term had a video, the script would be here.


Click box for answer.

A drawback of a pooled investment is the lack of customization. | True or False?


A Separately Managed Account (SMA) is a pooled investment. | True or False?

False. While the management of SMAs is centralized, the actual implementation is in a segregated account with individual stock and bond holdings, typically.

Questions or Comments?

Still unclear on Pooled Investments? Check out the Quant 101 Series of free financial modeling tutorials.

Related Terms

Our trained humans found other terms in the category security types you may find helpful.

What's Next?

If you like what we're doing, join us. Subscribe at YouTube and follow @factorpad on Twitter for updates.

Outline Back Tip Next

/ factorpad.com / fin / glossary / pooled-investment.html

pooled investment
fund investment
economies of scale
pooled investment fund
omnibus account
mutual fund
what is a pooled investment
pension fund
pooled investment funds
hedge fund
pooled investment vehicle
pooled fund
diversified portfolio

A newly-updated free resource. Connect and refer a friend today.