CFA Level I · CFA Level I Exam · Alternative Investment Features, Methods, and Structures
Compared with a separately managed account, an investor in a commingled fund is most likely to experience:
The investor in a commingled fund has less ability to tailor holdings to individual needs. Assets are pooled under one common strategy, whereas separately managed accounts allow customized guidelines and direct legal ownership of the underlying securities.
- Agreater customization of the investment guidelines
- Bless ability to tailor holdings to individual needsCorrect
- Cdirect legal ownership of each underlying security
Explanation
In a commingled fund, assets of many investors are pooled under one common strategy, so individual tailoring is limited. Separately managed accounts allow custom guidelines and direct ownership of securities.
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