Trust vs. Fund — What's the Difference?
By Tayyaba Rehman — Published on October 27, 2023
Trust is a legal entity holding assets for beneficiaries, while a fund is a sum of money saved or invested for a purpose.
Difference Between Trust and Fund
Table of Contents
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Key Differences
Trust and fund are both financial tools, but they operate on different principles and purposes. Trust, in the context of finance, refers to a legal arrangement where assets are held by one party (the trustee) for the benefit of another (the beneficiary). On the contrary, a fund is a collection of money intended for a specific purpose, whether it's an investment fund, a mutual fund, or a reserve fund.
While trust is about asset management for beneficiaries, a fund centers around pooling resources. It's also worth noting that trusts often contain funds.
For example, a trust might be established with a sum of money (a fund) that is meant to support a beneficiary's education. Conversely, a fund doesn't necessarily need a trust structure around it; it can simply be an aggregation of money.
Comparison Chart
Nature
Legal entity
Collection of money
Purpose
Holds assets for the benefit of another
Saved or invested for a specific purpose
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Examples
Living trusts, testamentary trusts
Mutual funds, pension funds
Management
Managed by trustees
Managed by fund managers
Duration
Can be temporary or perpetual
Usually has a specified duration
Compare with Definitions
Trust
A legal arrangement holding assets for a beneficiary.
She set up a trust for her grandchildren's education.
Fund
A sum of money saved for a particular purpose.
He established a fund for wildlife conservation.
Trust
Confidence in someone's reliability.
I have complete trust in her judgment.
Fund
To provide financial resources.
The government funds scientific research.
Trust
A business entity or conglomerate.
The oil trust dominated the market.
Fund
A sum of money saved or made available for a particular purpose
He had set up a fund to coordinate economic investment
Trust
Dependence on something future or contingent.
We're placing our trust in the weather forecast.
Fund
Provide with money for a particular purpose
The World Bank refused to fund the project
Trust
Firm belief in the integrity, ability, or character of a person or thing; confidence or reliance
Trying to gain our clients' trust.
Taking it on trust that our friend is telling the truth.
Fund
A source of supply; a stock
A fund of goodwill.
Trust
The condition and resulting obligation of having confidence placed in one
Violated a public trust.
Fund
A sum of money or other resources set aside for a specific purpose
A pension fund.
Trust
One in which confidence is placed.
Fund
Funds Available money; ready cash
Short on funds.
Trust
Custody; care
Left her papers in my trust during her illness.
Fund
An organization established to administer and manage a sum of money.
Trust
Something committed into the care of another; a charge
Violated a public trust.
Fund
Funds The stock of the British permanent national debt, considered as public securities. Used with the.
Trust
Reliance on something in the future; hope
We have trust that the future will be better.
Fund
To provide funds for
Funded the space program.
A fully funded pension.
Trust
Reliance on the intention and ability of a purchaser to pay in the future; credit
Bought the supplies on trust from a local dealer.
Fund
To convert (short-term government debt) into a long-term or floating debt with fixed interest payments.
Trust
A legal relationship in which one party holds a title to property while another party has the entitlement to the beneficial use of that property.
Fund
A sum or source of money.
The fund of a bank, commercial house, manufacturing corporation, etc.
A fund for the maintenance of underprivileged students
Trust
The confidence reposed in a trustee when giving the trustee legal title to property to administer for another, together with the trustee's obligation regarding that property and the beneficiary.
Fund
An organization managing such money.
Trust
The property so held.
Fund
A money-management operation, such as a mutual fund.
Several major funds were declared insolvent recently.
Trust
An institution or organization directed by trustees
A charitable trust.
Fund
A large supply of something to be drawn upon.
He drew on his immense fund of knowledge.
Trust
A combination of firms or corporations for the purpose of reducing competition and controlling prices throughout a business or industry.
Fund
(transitive) To pay or provide money for.
He used his inheritance to fund his gambling addiction.
Trust
To have or place confidence in; depend on
Only trusted his friends.
Did not trust the strength of the thin rope.
Could not be trusted to oversee so much money.
Fund
(transitive) To place (money) in a fund.
Trust
To have confidence in allowing (someone) to use, know, or look after something
Can I trust you with a secret?.
Fund
(transitive) To form a debt into a stock charged with interest.
Trust
To expect with assurance; assume
I trust that you will be on time.
Fund
An aggregation or deposit of resources from which supplies are or may be drawn for carrying on any work, or for maintaining existence.
Trust
To give credence to; believe
I trust what you say.
Fund
A stock or capital; a sum of money appropriated as the foundation of some commercial or other operation undertaken with a view to profit; that reserve by means of which expenses and credit are supported; as, the fund of a bank, commercial house, manufacturing corporation, etc.
Trust
To place in the care of another person or in a situation deemed safe; entrust
"the unfortunate souls who trusted their retirement savings to the stock" (Bill Barnhart).
Fund
The stock of a national debt; public securities; evidences (stocks or bonds) of money lent to government, for which interest is paid at prescribed intervals; - called also public funds.
Trust
To extend credit to.
Fund
An invested sum, whose income is devoted to a specific object; as, the fund of an ecclesiastical society; a fund for the maintenance of lectures or poor students; also, money systematically collected to meet the expenses of some permanent object.
Trust
To have or place reliance; depend
We can only trust in our guide's knowledge of the terrain.
Fund
A store laid up, from which one may draw at pleasure; a supply; a full provision of resources; as, a fund of wisdom or good sense.
An inexhaustible fund of stories.
Trust
To be confident; hope.
Fund
To provide and appropriate a fund or permanent revenue for the payment of the interest of; to make permanent provision of resources (as by a pledge of revenue from customs) for discharging the interest of or principal of; as, to fund government notes.
Trust
Confidence in or reliance on some person or quality.
He needs to regain her trust if he is ever going to win her back.
To lose trust in someone
Build up trust
A relationship built on mutual trust
Fund
To place in a fund, as money.
Trust
Dependence upon something in the future; hope.
Fund
To put into the form of bonds or stocks bearing regular interest; as, to fund the floating debt.
Trust
Confidence in the future payment for goods or services supplied; credit.
I was out of cash, but the landlady let me have it on trust.
Fund
A reserve of money set aside for some purpose
Trust
That which is committed or entrusted; something received in confidence; a charge.
Fund
A supply of something available for future use;
He brought back a large store of Cuban cigars
Trust
That upon which confidence is reposed; ground of reliance; hope.
Fund
A financial institution that sells shares to individuals and invests in securities issued by other companies
Trust
(rare) Trustworthiness, reliability.
Fund
Convert (short-term floating debt) into long-term debt that bears fixed interest and is represented by bonds
Trust
The condition or obligation of one to whom anything is confided; responsible charge or office.
Fund
Place or store up in a fund for accumulation
Trust
(legal) The confidence vested in a person who has legal ownership of a property to manage for the benefit of another.
I put the house into my sister's trust.
Fund
Provide a fund for the redemption of principal or payment of interest
Trust
(legal) An arrangement whereby property or money is given to be held by a third party (a trustee), on the basis that it will be managed for the benefit of, or eventually transferred to, a stated beneficiary; for example, money to be given to a child when he or she reaches adulthood.
Fund
Invest money in government securities
Trust
A group of businessmen or traders organised for mutual benefit to produce and distribute specific commodities or services, and managed by a central body of trustees.
Fund
Accumulate a fund for the discharge of a recurrent liability;
Fund a medical care plan
Trust
(computing) Affirmation of the access rights of a user of a computer system.
Fund
Furnish money for;
The government funds basic research in many areas
Trust
(transitive) To place confidence in, to rely on, to confide in.
We cannot trust anyone who deceives us.
Fund
A stock or capital.
The country's gold fund was depleted.
Trust
To have faith in; to rely on for continuing support or aid.
Fund
A fiscal and accounting entity.
The public fund accounts for taxpayers' money.
Trust
(transitive) To give credence to; to believe; to credit.
Fund
An investment vehicle pooling assets.
She invested her savings in a mutual fund.
Trust
(transitive) To hope confidently; to believe (usually with a phrase or infinitive clause as the object)
I trust you have cleaned your room?
Trust
(transitive) to show confidence in a person by entrusting them with something.
Trust
(transitive) To commit, as to one's care; to entrust.
Trust
(transitive) To give credit to; to sell to upon credit, or in confidence of future payment.
Merchants and manufacturers trust their customers annually with goods.
Trust
To rely on (something), as though having trust (on it).
To trust to luck
Having lost the book, he had to trust to his memory for further details.
Trust
To risk; to venture confidently.
Trust
(intransitive) To have trust; to be credulous; to be won to confidence; to confide.
Trust
To sell or deliver anything in reliance upon a promise of payment; to give credit.
Trust
(obsolete) Secure, safe.
Trust
(obsolete) Faithful, dependable.
Trust
(legal) of or relating to a trust.
Trust
Assured resting of the mind on the integrity, veracity, justice, friendship, or other sound principle, of another person; confidence; reliance; reliance.
Most take things upon trust.
Trust
Credit given; especially, delivery of property or merchandise in reliance upon future payment; exchange without immediate receipt of an equivalent; as, to sell or buy goods on trust.
Trust
Assured anticipation; dependence upon something future or contingent, as if present or actual; hope; belief.
His trust was with the Eternal to be deemedEqual in strength.
Trust
That which is committed or intrusted to one; something received in confidence; charge; deposit.
Trust
The condition or obligation of one to whom anything is confided; responsible charge or office.
[I] serve him truly that will put me in trust.
Reward them well, if they observe their trust.
Trust
That upon which confidence is reposed; ground of reliance; hope.
O Lord God, thou art my trust from my youth.
Trust
An estate devised or granted in confidence that the devisee or grantee shall convey it, or dispose of the profits, at the will, or for the benefit, of another; an estate held for the use of another; a confidence respecting property reposed in one person, who is termed the trustee, for the benefit of another, who is called the cestui que trust.
Trust
An equitable right or interest in property distinct from the legal ownership thereof; a use (as it existed before the Statute of Uses); also, a property interest held by one person for the benefit of another. Trusts are active, or special, express, implied, constructive, etc. In a passive trust the trustee simply has title to the trust property, while its control and management are in the beneficiary.
Trust
A business organization or combination consisting of a number of firms or corporations operating, and often united, under an agreement creating a trust (in sense 1), esp. one formed mainly for the purpose of regulating the supply and price of commodities, etc.; often, opprobriously, a combination formed for the purpose of controlling or monopolizing a trade, industry, or business, by doing acts in restraint or trade; as, a sugar trust. A trust may take the form of a corporation or of a body of persons or corporations acting together by mutual arrangement, as under a contract or a so-called gentlemen's agreement. When it consists of corporations it may be effected by putting a majority of their stock either in the hands of a board of trustees (whence the name trust for the combination) or by transferring a majority to a holding company. The advantages of a trust are partly due to the economies made possible in carrying on a large business, as well as the doing away with competition. In the United States severe statutes against trusts have been passed by the Federal government and in many States, with elaborate statutory definitions.
Trust
Held in trust; as, trust property; trustmoney.
Trust
To place confidence in; to rely on, to confide, or repose faith, in; as, we can not trust those who have deceived us.
I will never trust his word after.
He that trusts every one without reserve will at last be deceived.
Trust
To give credence to; to believe; to credit.
Trust me, you look well.
Trust
To hope confidently; to believe; - usually with a phrase or infinitive clause as the object.
I trust to come unto you, and speak face to face.
We trustwe have a good conscience.
Trust
To show confidence in a person by intrusting (him) with something.
Whom, with your power and fortune, sir, you trust,Now to suspect is vain.
Trust
To commit, as to one's care; to intrust.
Merchants were not willing to trust precious cargoes to any custody but that of a man-of-war.
Trust
To give credit to; to sell to upon credit, or in confidence of future payment; as, merchants and manufacturers trust their customers annually with goods.
Trust
To risk; to venture confidently.
[Beguiled] by theeto trust thee from my side.
Trust
To have trust; to be credulous; to be won to confidence; to confide.
More to know could not be more to trust.
Trust
To be confident, as of something future; to hope.
I will trust and not be afraid.
Trust
To sell or deliver anything in reliance upon a promise of payment; to give credit.
It is happier sometimes to be cheated than not to trust.
Her widening streets on new foundations trust.
They trusted unto the liers in wait.
Trust
Something (as property) held by one party (the trustee) for the benefit of another (the beneficiary);
He is the beneficiary of a generous trust set up by his father
Trust
Certainty based on past experience;
He wrote the paper with considerable reliance on the work of other scientists
He put more trust in his own two legs than in the gun
Trust
The trait of trusting; of believing in the honesty and reliability of others;
The experience destroyed his trust and personal dignity
Trust
A consortium of independent organizations formed to limit competition by controlling the production and distribution of a product or service;
They set up the trust in the hope of gaining a monopoly
Trust
Complete confidence in a person or plan etc;
He cherished the faith of a good woman
The doctor-patient relationship is based on trust
Trust
A trustful relationship;
He took me into his confidence
He betrayed their trust
Trust
Have confidence or faith in;
We can trust in God
Rely on your friends
Bank on your good education
I swear by my grandmother's recipes
Trust
Allow without fear
Trust
Be confident about something;
I believe that he will come back from the war
Trust
Expect and wish;
I trust you will behave better from now on
I hope she understands that she cannot expect a raise
Trust
Confer a trust upon;
The messenger was entrusted with the general's secret
I commit my soul to God
Trust
Extend credit to
Trust
Custodial responsibility.
He left his stocks in trust with his attorney.
Common Curiosities
How does a fund differ from a bank account?
A fund pools money for specific purposes like investment, while a bank account is for general deposit and withdrawal.
Can a fund be part of a trust?
Yes, a trust can hold a fund as one of its assets.
Are mutual funds a type of trust?
Often, mutual funds operate under a trust structure, with fund managers acting similarly to trustees.
Can trusts have more than one beneficiary?
Yes, trusts can have multiple beneficiaries.
What's the difference between an endowment fund and a mutual fund?
An endowment fund supports institutions like universities, while a mutual fund pools investments for returns.
What's the primary purpose of a trust?
A trust's primary purpose is to hold and manage assets for the benefit of specific beneficiaries.
How is the concept of trust used in daily language?
Beyond finance, "trust" denotes confidence or reliance on a person or thing.
Is a trust always tied to money or financial assets?
No, trusts can hold various assets, from real estate to intellectual property.
Who manages the assets in a trust?
Assets in a trust are managed by a trustee or trustees.
How do funds generate returns?
Funds can generate returns through interest, dividends, capital gains, or other investment avenues.
What does it mean to "fund a project"?
To "fund a project" means to provide the financial resources necessary for the project's execution.
How are fund managers compensated?
Fund managers often receive a management fee, and sometimes a percentage of the fund's profits or performance.
Can anyone set up a fund?
While the specifics vary, generally, anyone can set up a fund if they follow legal and regulatory requirements.
Is it mandatory for a trust to distribute its assets?
It depends on the trust terms. Some require distributions, while others allow asset accumulation.
How are trusts taxed?
Trust taxation depends on the trust type and jurisdiction, but they often face different rules than individuals.
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Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.