What benefits do pooled investments offer over individually managed accounts?
Pooled investments offer certain advantages over individually managed accounts. When all investors’ funds are pooled together and traded collectively, the pool’s exposure to the risks of leverage are lessened to some degree, i.e., the pool may be better able to withstand an adverse market move than each of the pool’s participants would if their funds were in individually managed accounts. Also, a uniform pro-rata rate of return is easier to achieve on behalf of pool participants than may be possible for clients invested in individually managed accounts.