Treading Carefully in Pool Funds

Pool funds, like mutual funds, co-mingle investor funds for purposes of investing. Investors hold units in the pool fund, and ideally the unitholder (investor) achieves lower costs for portfolio diversification and benefits from efficiencies of scale. Pool funds are also designed to achieve fairness of allocation across clients.

For Series A and F, many investment managers charge management fees inside the pool. This does not provide complete transparency of fees. Clients may know the percentage fees charged, but dollar fees are not disclosed and returns are shown net of fees.

At HighView, we believe that advisors and investment managers should provide full transparency of all investment solutions recommended to clients. This transparency should include all aspects of the clients’ portfolios with respect to fees and costs, so investors can easily understand a “total cost of ownership”.

We encourage you to watch our video, where we discuss pool funds and transparency in detail, including some questions to ask when investing.

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