Commingled Fund

It’s a bunch of assets which used to be single, having come to the finance party stag...now being put together in one large Tinder group. For that finance party, the host had to make the requisite ice sculpture. If that sculpture was done to entertain only one set of assets, its relative cost was probably high. But if it covered a hundred different accounts all invited to the party to ogle the Great Bald Wonder...then its cost per visitor is some one hundredth of what it would have been otherwise.

Commingled funds exist typically when a family is successful and...disparate.

Joe made his money from a shoe factory he sold. Bob made his money from his special head shine serum. And Susy made her money from her plastic surgery clinic. By commingling their assets, they sort of become a kind of hybrid mutual fund...only they don't have to suffer all the regulatory filings of being a mutual fund. They hire a professional manager to run the commingled assets. Think: retired money manager, or someone in the broker-dealer world.

They can draw margin against their funds. They can sell stocks short, i.e. bet they’ll go down. They can buy and sell options in their funds...and a bunch of other freedoms that just buying a vanilla mutual fund wouldn’t have given them.

Wow. With all that, what can't commingled fund do? Well, it sure won't protect you from frostbite if that ice sculpture leaves you a little too...thirsty.