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Finance Dictionary and Glossary of Investment Terms
institutional fund
Definition 1.
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.
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Definition 2.
A mutual fund targeting high value investors with low fees, but high minimum requirements.
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Definition 3.
A mutual fund designed for institutional investors.An instututional fund must meet at least one of the following qualifications:a) has the word ""institutional"" in its name.b) has a minimum initial purchase of $100,000 or more.c) states in its prospectus that it is designed for institutional investors, or those purchasing on a fiduciary basis.
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