Fund of Funds
A mutual fund that invests in other mutual funds.
Investopedia Commentary
For example, an investor would select a general risk profile and the fund-of-funds manager would pick underlying investments from a range of products managed by external managers. The big downside is you are paying management fees twice.
This method is sometimes known as "multi-management."
Related Links
Mutual Fund Basics Tutorial
Life-Cycle Funds: Can It Get Any Simpler?
Advantages Of Mutual Funds
The Dangers of Over-Diversification
See also: Diversification, Expense Ratio, Expense Ratio, Fund Manager, Master Fund, Mutual Funds, Portfolio
Also spelled: Funds of Funds
fund of funds