A Commingled Fund is a kind of mutual fund or common trust fund which consists of multiple kinds of assets from several accounts combined together. 'Commingling' these separate assets mitigates risk for the trader through investment diversification and reduces the cost of managing each account separately. |
Commingled Funds were previously labeled a 'breach of trust,' as unscrupulous trustees would often mix their own funds with the funds of his/her client, making it difficult to determine which funds belonged to the fiduciary and which belonged to the client. This created problems of embezzlement and complications in gain/loss allocations.
However, recently the Federal Reserve Board has allowed bank trust departments to offer commingled accounts to Individual Retirement Accounts, allowing customers to pool their retirement and benefits plans together.
Commingled Funds are also called 'pooled funds' and 'Master Trusts.'