Why run a strategy as a fund instead of separate accounts?
RIAs · Video 2 of 8 · 0:36 ·
A fund pools investors' money in one account: one order, one book, one track record. A small investor gets the same trades at the same price as a large one, and a new investor subscribes into the same account instead of opening a new one. Investors receive statements, not access to the brokerage account, so live positions stay private.
Everything here is for educational purposes only and is not legal, tax or investment advice, or an offer to buy or sell any security. Laws and thresholds change and depend on your facts, so talk to a qualified attorney before acting.
Key facts
- One pooled account instead of an account per client.
- No splitting and allocating each order across accounts.
- Small and large investors get the same trades.
- New investors subscribe into the existing account.
- Investors see statements, not the brokerage account.
Transcript
Founder: I run one strategy across forty client accounts. Every trade gets split forty ways.
Operator: In a fund, it's one account. One order, one book, one track record.
Operator: A $50,000 investor gets the same trades, at the same price, as a $5 million one.
Founder: And when a new client joins?
Operator: With separate accounts, that's a new account to set up and trade. In a fund, they subscribe, and their money joins the same account.
Founder: Do investors see the positions?
Operator: They get a statement, not a login to the brokerage account. So your live positions stay private.
Operator: One strategy. One account.
Founder: So I run one strategy across forty accounts...