A master trust is an investment vehicle that pools assets for collective control and management. Similar to a pooled trust, the master trust refers to the central fund where assets are managed in a hub and spoke structure. For example, an employer can utilize a master trust structure to pool the investments in a pension or employee benefit plan. The structure of a master trust provides greater economies of scale, by enabling investors to pool their investments together. This benefit allows the portfolio manager to manage a single pool of investments, keeping transaction costs low and providing access to less expensive share classes and overall fees. For further detail, see this link.
[Last updated in July of 2020 by the Wex Definitions Team]