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January 9th - UK government bonds surged at the start of the year as the British government reduced long-term borrowing and weak inflation fueled market bets on a Bank of England rate cut. UK bonds rose across the board, with 10-year bonds poised for their biggest weekly gain since October, significantly outperforming less volatile German and US bonds. Craig Inches, head of rates and cash at Royal London Asset Management, said the prospect of a rate cut, coupled with reduced sales of long-term bonds, made UK bonds "very cheap" compared to similar assets. He stated, "UK bonds are an excellent place to put your money." The money market currently estimates a near 90% probability of another 25-basis-point rate cut by the Bank of England in April. The probability of a second rate cut by December has risen from less than 50% two weeks ago to 70%. He added, "We believe the Bank of England will have to cut rates again in February, which, combined with supply shortages, will lead to lower yields, a flattening yield curve, and allow UK bonds to outperform their global counterparts."Italys retail sales rose 1.3% year-on-year in November, up from 1.30% in the previous month.Italys seasonally adjusted retail sales rose 0.5% month-on-month in November, compared with 0.50% in the previous month.January 9th - Analysts point out that US job growth may slow in December due to companies remaining cautious about hiring amid import tariffs and increased investment in artificial intelligence. However, the unemployment rate is expected to fall to 4.5%, which could support market expectations that the Federal Reserve will keep interest rates unchanged this month. The non-farm payroll report, expected to be released tonight, is anticipated to show that the US labor market remains in what economists and policymakers call a "no hiring, no laying off" mode. This would also confirm that the US economy is in a phase of jobless expansion. In the third quarter of last year, economic growth and worker productivity surged, partly attributed to a surge in AI spending. Sal Guatieri, senior economist at BMO Capital Markets, stated, "This isnt entirely due to weak demand, as the economy appears to be performing well, but companies are very cautious about hiring new employees. This could be related to a willingness to control costs, perhaps due to tariff pressures, or perhaps because many companies believe that AI-driven automation will lead to productivity gains."On January 9th, Zhu Meina, Deputy Director of the Standards and Technology Department of the State Administration for Market Regulation, introduced at a special press conference of the State Administration for Market Regulation that the next step for the State Administration for Market Regulation will be to further accelerate the development of national standards related to the new energy vehicle, lithium battery, and photovoltaic industries. At the same time, in conjunction with the Ministry of Industry and Information Technology, on-site promotion meetings for standards will be held to help the industry accurately grasp the content of the standards, implement and apply the standards in a timely manner, and promote the rapid implementation and effectiveness of the standards, so as to lead and drive the high-quality development of the "new three products" through standards.

The Ultimate Guide to Commingled Funds

Drake Hampton

Mar 25, 2022 14:46

How Is a Commingled Fund Defined? 

A commingled fund is a portfolio that combines assets from many accounts. Commingled funds exist to eliminate the administrative overhead associated with handling constituent accounts separately.

 

Commingled funds are a sort of pooled investment vehicle that is neither publicly traded or accessible to normal investors. Rather than that, they are employed in closed pension funds, insurance policies, and other institutional accounts.


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Recognize a Commingled Fund

Commingling is the process of pooling investors' assets into a single fund or investment vehicle. Commingling is a fundamental characteristic of the majority of investment funds. Additionally, it may be used to aggregate diverse forms of donations for a variety of reasons.

 

Commingled funds are comparable to mutual funds in many aspects. Both are managed professionally by one or more fund managers and invest in fundamental financial products such as stocks, bonds, or a mix of the two.

 

Additionally, commingled fund investments, like mutual funds, benefit from economies of scale, which reduce trading costs per dollar invested, and diversity, which reduces portfolio risk. 

Commingled Funds Supervision

One significant distinction is that commingled funds are not regulated by the Securities and Exchange Commission (SEC), which means they are exempt from a range of onerous disclosure requirements. On the other hand, mutual funds are required to register with the SEC and adhere to the Investment Company Act of 1940.

 

Commingled funds, on the other hand, are not fully unregulated: they are subject to examination by the United States Office of the Comptroller of the Currency and specific state regulators.

 

While mutual funds require investors to read a prospectus, commingled funds need investors to read a Summary Plan Description (SPD). SPDs provide further information about the fund, including its objectives, investing strategy, and management team. The SPD document outlines the rights and responsibilities of plan members and beneficiaries. Every investor in a commingled fund should thoroughly read the SPD.

The Benefits and Drawbacks of Commingled Funds

Due to the lesser degree of regulation, a commingled fund's legal and operating costs are reduced. The fewer the costs, the less a fund's returns are impacted. If a commingled fund and a comparable mutual fund have the same gross performance, the commingled fund's net return is expected to be higher due to its reduced expenditures.

 

Commingled funds have the drawback of not having ticker symbols and not being publicly traded. Outside investors may find it difficult to follow the fund's capital gains, dividends, and interest income due to this lack of available information. This information is significantly more visible in the case of mutual funds.

 

A Commingled Fund is an illustration of this type of fund.

 

As with a mutual fund, the Fidelity Contrafund Commingled Pool is managed by a portfolio manager and makes essential information available to the public via quarterly reports. It invests primarily in large-cap growth stocks, with an emphasis on information technology, communication services, consumer discretionary, financials, and health care.

 

The Contrafund Commingled Pool's cost ratio of 0.43 percent is lower than the average expense ratio of mutual funds—including its mutual fund equivalent, the Fidelity Contrafund, which has an expense ratio of.86 percent. Since its launch in 2014, the fund has had an annualized return of 15.85 percent, compared to the S&P 500 index's 14.12 percent.

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