A pooled investment combines capital from multiple investors to hold several assets or companies. ETFs commonly pool stocks, bonds, or other ETFs, spreading exposure across holdings. section 6.5.2 section 1.6
Analyze pooled investments by separating their structure, income, access, and uncertainty:
- An ETF is identified by a ticker such as VOO or SPY, trades during exchange hours, and may pay dividends. section 6.5.2
- ETF metrics describe the pool: VOO’s P/E ratio represents the weighted average of the ratios of its underlying assets. section 6.5.2
- Venture funds pool private capital, invest in multiple start-ups, and commonly charge management and performance fees. section 12.2.1
A pooled investment in practice
A venture fund might collect $100,000 or more from an investor, invest across start-ups, charge about 2% annually, and allocate 20% of profits as carry. The investor receives the remaining profits after fees, alongside the returned investment under the stated flow. section 12.2.1
