master trust

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. 

[Last reviewed in July of 2020 by the Wex Definitions Team]

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