This vehicle pools money from multiple investors to purchase securities such as stocks, bonds, and/or money market instruments. As an investor in a mutual fund, you have what’s called a “pro rata interest” in the pool of securities, as opposed to directly owning individual securities or stocks. Each fund is a portfolio of a number of securities built around a specific asset class or investment objective—such as "U.S. stocks" or "long-term growth."
Exchange-traded funds (ETFs)
ETFs are traded on stock exchanges and typically track an index. They invest in securities intended to track the returns of stocks, commodities, bonds, or other assets, such as foreign currencies. The popular S&P 500 Index, for example, is the underlying (“reference”) index for a number of ETFs.
Separately Managed Accounts (SMAs)
Like pooled investment vehicles, such as mutual funds and ETFs, SMAs are portfolios managed by a professional investment manager. Unlike pooled investment vehicles, the investor maintains the account and directly owns the portfolio securities.
This vehicle basically describes any non-publicly traded business structure that pools together the capital of many investors in a manner comparable to a mutual fund. The most common structures are limited partnerships and limited liability companies. The daily management for these is the responsibility of the general partner or managing member, and investors take the role of limited partners or members, respectively.