At a high level the type of fund that a portfolio manager can manage can be split into segregated mandates and pulled funds segregated mandates have just one investor in the fund and the portfolio manager will tailor the Investments held within the portfolio to the client's individual circumstances.

In a pool fund there will be many different investors potentially reaching into the thousands whose money will all be combined together into a single portfolio of assets.

The portfolio will follow a predefined investment mandate which will identify the objectives of the fund and which types of Securities are available for the portfolio manager to invest in segregated mandates are much more typical for institutional investors such as foundations or Pension funds and they will typically have high minimum sizes.

While segregated mandate portfolios are tailored to the individual investor. They do have higher fees than pulled funds. This can also be referred to as discretionary portfolio management.

Who the funds have lower minimum size requirements even as low as 250 dollars and lower costs than segregated funds but the investor will not have any control over the Investments held within the portfolio that is all down to the portfolio manager. And there may be tax inefficiencies created since the decisions of the portfolio manager within the fund may not be optimal for all investors tax positions.

Going into more detail on the pool of funds. There are three main types of pooled funds.

The differences between these types of funds relates to the structure of the fund itself and not on the types of Investments held open-ended funds have variable Capital which means they can grow as big as they like as their name suggests as more money is invested into the fund the fund will get larger and will issue new shares or units to represent the additional investment open-ended funds do however typically only have one time per day when you can invest new money into the fund or sell an existing investment. For example, if that pricing point is at 4pm then an investor wishing to invest money at 1pm will only be able to invest at the next price later that day at 4pm if markets rise before 4pm then the investment price. The investor will get will be higher and the investors money will be able to buy fewer shares or units.

The price of an open-ended fund does reflect the value of the underlying assets held within the fund itself also referred to as the net asset value or nav and investors must trade directly with a fund itself with new money invested in for fund and existing Investments sold back to the fund itself.

There is no secondary market for the shares or units in open-ended funds the limit on trading exists to reduce the administrative burden on the fund. So as the only have to invest new capital or have cash available to meet liquidations once per day.

A closed-ended fund is much more like a traditional company with a fixed number of shares in issue.

The shares of this fund will be listed on a stock exchange and can be traded like any other listed company during regular Market hours with ongoing pricing throughout the day the price that trading takes place at is determined by supply and demand as well as by the value of the underlying investments in the fund meaning that the funds share price can be at a premium or a discount to the net asset value.

Trading in closed-ended funds shares takes place on the secondary Market meaning there is limited impact on the fund itself from any trading activity in the funds shares.

The third fund type are exchanged traded funds or ETFs which attempt to combine the benefits of both open-ended and closed-ended funds.

ETFs are open-ended which means that there is no limit on the supply of shares in the fund which results in the share price being close to the nav. However, there is also ongoing trading in ETFs over an exchange during regular Market hours. Meaning that investors do not have to wait until the next pricing point to be exposed to market price movements.

This combination of factors is achieved through the in-kind creation process, which means that investors do not deliver cash to the fund when they wish to invest into the fund but instead they must deliver a portfolio of Securities which matches the current Holdings of the fund.

This is only really something that financial institutions may be able to do for most retail investors trading existing shares over an exchange is the typical trading route.

However, there is a downside to ETFs in order for new investors to be able to deliver a portfolio of Securities to the fund the fund must disclose its Holdings on a daily basis. This is not something that active managers wish to do since it will give away their investment strategy. So ETFs tend to be passive funds which track a benchmark.