institutional fund

Definition

A mutual fund that targets pension funds, endowments, and other high net worth entities and individuals. Institutional funds usually have lower operating costs and higher minimum investments than retail funds. Often their main objective is to reduce risk, so they invest in hundreds of different securities, which makes them among the most diversified funds available. They also do not tend to trade securities very often, so they are able to keep operating costs to a minimum. Although in the past investors typically needed at least $1 million in order to invest in an institutional fund, nowadays some discount brokers offer access to these funds for smaller amounts.

Use institutional fund in a sentence

The institutional fund was a really good thing to set up and I liked what it was doing for our company and everything.

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You should always make sure you have done your research before you decide which institutional fund to invest in for your company.

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The institutional fund that the broker was using was highly diversified and was creating returns even higher than the broker's expectations in the latest quarter.

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institution institutional investor