What Is a Grasp Fund?
A master fund is a collective pool of assets used in a master-feeder investment structure, which offers the help of reduced operating costs and trading expenses.
Master Fund Explained
A master fund is an investment fund reach-me-down for transacting securities when a master-feeder structure is utilized. A master-feeder structure builds on the concept of managing portfolios from a collective investment funds. It allows a fund company managing numerous feeder funds with a similar objective to more comprehensively liberate advantage of transactional economies of scale.
Master-feeder arrangements can be used with many different pooled funds. The resolution to use a master-feeder structure is made on a case-by-case basis as there are numerous advantages and often many factors involved.
Open-End Reciprocal Funds
An open-end mutual fund is managed as a collective investment pool offering multiple
Master-Feeder Alternatives
Other sorts of funds, outside of traditional open-end funds, may also choose to build a master-feeder structure. A master fund may be started with feeder funds when there is significant differentiation needed for different types of investors. For example, a ready with U.S. and
Regulation and Disclosure
Master-feeder structures can be utilized by all types of funds. If a master-feeder structure is utilized in a U.S. regulated lolly, it will be disclosed in a fund’s prospectus, with the terms of the master-feeder structure provided in detail. Master-feeder funds can be a serviceable way to improve the cost efficiencies of a fund, however, the slightly more complicated structure can make them a higher imperil investment in jurisdictions with minimal regulations.