Commingled Trust Fund
You wouldn’t want your trust fund to be commingled with anything bad, but rest assured that all the funds in a commingled trust fund belong to you. They simply come from a variety of sources, such as retirement plans and other assets, and are managed by a trust company or bank.
There can be many advantages to investing in a commingled trust fund. All the assets, such as stocks and bonds, can be managed with the same investment strategy, and they are less expensive than mutual funds that work in a similar way. They also aren’t going to incur large marketing expenses or charge higher fees because they are appealing to a smaller audience. However, you can’t just pick up the phone and sign up for a commingled trust fund. They are limited to investors in certain 401(k) and other retirement plans.
You can rest easy knowing that the fund management is overseen by state banking authorities or the U.S. Office of the Comptroller. However, unlike mutual funds, they are not regulated by the Securities and Exchange Commission (SEC), so they have fewer reporting requirements. While on one hand this saves the trust fund money, which can be passed onto investors, it also makes it more difficult to look up their past performance to evaluate risk. So if you do have access to a commingled trust fund for your retirement plan, be sure to compare it to a mutual fund with not just returns...but the fees they charge.
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