| Definition |
A fund where multiple investors contribute money to a common pool managed collectively. |
A fund or account managed exclusively for a single investor's capital and objectives. |
| Ownership |
Joint ownership among all investors based on their contribution units. |
Full ownership lies with the individual investor. |
| Examples |
Mutual funds, ETFs, hedge funds, pension funds. |
Separately managed accounts (SMAs), family offices, trust portfolios. |
| Customization |
Limited customization; same strategy applied to all investors. |
Highly customizable to individual goals, risk tolerance, and time horizon. |
| Minimum Investment |
Generally low; accessible to retail investors. |
Typically requires a high capital base or net worth. |
| Management |
Professionally managed by fund managers on behalf of all investors. |
Professionally or self-managed with decisions tailored to one client. |
| Risk Exposure |
Risk is shared among all investors in the pool. |
Risk is entirely borne by the individual investor. |
| Transparency |
Moderate transparency, periodic reporting to all investors. |
High transparency; investor sees every transaction and holding. |
| Fees |
Usually includes management and expense ratio fees shared by all. |
Customized fee structures; can include advisory or performance-based fees. |
| Diversification |
Generally well-diversified across sectors, assets, and geographies. |
Diversification depends on individual strategy and fund size. |
| Liquidity |
High for open-ended funds; variable for closed-end and hedge funds. |
Depends on the asset class and structure; may be less liquid. |
| Tax Efficiency |
Tax impact is passed proportionately to all investors. |
Tax planning can be personalized for optimal outcomes. |
| Control |
Investors have no direct control over individual securities. |
Investor has direct input or decision-making in asset selection. |
| Regulation |
Highly regulated by financial authorities (e.g., SEBI, SEC). |
Regulated depending on structure; SMAs are lightly regulated compared to mutual funds. |
| Scalability |
Highly scalable due to pooled nature and standardized approach. |
Limited scalability; depends on manager capacity and customization level. |
| Investment Strategy |
Follows a pre-defined strategy outlined in the fund prospectus. |
Flexible and adaptive to the investor's changing needs. |
| Suitability |
Ideal for small investors seeking diversification with low capital. |
Best for high-net-worth individuals needing personalized service. |
| Performance Attribution |
Shared; cannot be attributed to a single investor’s input. |
Can be analyzed and attributed to investor-specific decisions. |
| Withdrawal Flexibility |
Subject to fund rules and redemption cycles. |
Investor can withdraw or restructure at will (within legal bounds). |
| Rebalancing |
Done periodically for the whole fund. |
Customized based on investor’s specific asset allocation goals. |
Pooled Investment Fund vs Individual Investment Fund