Subfondo

Subfondo, or subfund, is a term used in fund management to denote a specific investment compartment within an umbrella fund or master-feeder structure. A subfund has its own assets, liabilities, investment objective, and net asset value, and is offered to investors through its own units or shares. The umbrella fund provides the legal framework and governance for multiple subfunds, which can pursue different strategies within a single legal entity.

Within an umbrella fund, the subfunds share the same legal structure, administrator, and often management company, but they maintain distinct portfolios and financial statements. Each subfund typically has a separate investment policy, risk profile, currency (in some cases), and fee schedule. Units of one subfund are not interchangeable with those of another, and investors’ rights are defined per subfund in the prospectus.

Liability is generally ring-fenced: the assets and liabilities of one subfund are isolated from others, protecting investors in other subfunds from the performance or risk of any single subfund. The degree of isolation, and the possibility of cross-liability, depends on the jurisdiction and the fund’s governance provisions.

Tax treatment of subfunds varies by jurisdiction. In many jurisdictions, subfunds are treated as separate taxable entities or as separate accounting compartments within a transparent vehicle. Net asset value, performance, and distributions are calculated separately for each subfund, and investments or currency exposure can differ across subfunds.

Subfunds are commonly used in UCITS, Luxembourg SICAVs, Irish UCITS, and other cross-border funds to offer multiple strategies under a single umbrella. They allow a fund provider to add new strategies quickly without creating a new legal entity, facilitate currency diversification, and tailor risk and fee structures to different investor segments. Investors should consult the fund’s prospectus to understand the specific terms of each subfund.