There are multiple investment fund options available, and each has slightly different ramifications for combining qualified and non-qualified investors.

Common trust fund, collective group trust, collective investment trust

In 1988, the original business plan for Nottingham was to combine investment assets in a trust vehicle given the assumptions regarding cost for establishing and operating a mutual fund. Trusts are less expensive both to establish and to operate, since neither require interaction with the Securities and Exchange Commission. Trusts are typically under the auspices of a custodian with trust powers, regulated by the banking regulators either state or federal.

Since most qualified plans are trusts, these trust vehicles can be ideal for commingling qualified assets, and that is how most are used.

For non-qualified assets, trust vehicles do not work well or at all.

Private fund or hedge fund

Funds can be structured that are exempt from registration under the Securities Act of 1933 by limiting the investors eligible to purchase the Fund to accredited or qualified investors. While large retirement plans often meet the financial qualifications, there are other considerations including Unrelated Business Taxable Income, and some other structural and tax considerations. Most private funds, therefore, either do not accept qualified assets or limit the qualified money shareholders to less than 25% of the fund.

There are ways to structure a private fund with a master feeder onshore/offshore structure to accommodate qualified assets, but the limitation on number of shareholders will remain, with a limit of either 100 or 500 shareholders depending on the type of fund.

Private funds are therefore not a good option for qualified assets.

Registered investment companies

Also known as mutual funds registered under the Investment Company Act of 1940 and operated in compliance with Subchapter M of the internal revenue code are the most regulated, and most flexible, option for combining any type of investment account. As a tradeoff for additional regulatory oversight both in the establishment and the administration of mutual funds, there are few restrictions on who the investors can be in a mutual fund.

Mutual funds are pass through entities for tax purposes, and all shareholders receive dividends paying out substantially all realized capital gains and net income received by the mutual fund.

Examples of registered investment companies that have these attributes in common are: