Fund of funds

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Fund of funds

A mutual fund or hedge fund that invests in other funds.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Fund of Funds

A mutual fund that invests exclusively in other mutual funds. Theoretically, funds of funds allow the investor to diversify risk even more than in a regular mutual fund without reducing return significantly. One disadvantage is the fact that most funds of funds have higher fees because shareholders have to pay fees for the funds of funds themselves and must also pay fees for the underlying funds. Funds of funds were especially popular in the 1960s.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

fund of funds

An open-end investment company that invests only in the shares of other open-end investment companies. This type of mutual fund was popular during the 1960s but subsequently fell into disfavor with investors. Many analysts consider it more of a gimmick than a useful investment vehicle.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Fund of funds (FOF).

A fund of funds is a pooled investment, such as a mutual fund or a hedge fund, whose underlying investments are other funds rather than individual securities.

Despite some major differences, what all funds of funds have in common is an emphasis on diversification for its potential to reduce risk without significantly reducing return.

They're also designed to simplify the investment process by offering one-stop shopping.

Many mutual fund FOFs are asset allocation funds and typically include both stock and bond funds in a particular combination that the FOF manager has chosen to meet a specific objective. A mutual fund FOF may select all its funds from a single fund family or it may choose funds offered by different investment companies.

A hedge fund FOF, which owns stakes in other hedge funds, allows investors to commit substantially less money to gain exposure to this investment category than it would cost to invest in even one fund.

A major drawback with all funds of funds is that the fees tend to be higher than you would pay owning the underlying funds directly.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Patients with RA were divided into two groups: patients with FOF (n=70) and without FOF (n=50).
As the unit began FOF operations, it became obvious that detainee collection point construction was only one area that lacked proper direction and momentum.
Tartisma: FOF, akut ve kronik SSKR hastaliginin tani ve takibinde kullanilabilecek yararli bir goruntuleme yontemidir.
The aim of the present study was to evaluate fall history, FOF, and fall risk in patients with RA and to investigate their relationships between the functional status, balance, walking speed, disability, disease activity, and presence of AAS.
She got the rest through a loose network of contacts, including FOF affiliates and the organization's hotline and internet message board.
Participants who reported avoiding activities because of FOF had higher MFES scores, representing lower self-efficacy or confidence, than those not reporting FOF.
FoF chairman Malcolm Wilkinson said: "I know of two people who were the subject of incidents there.
The race was the first fundraiser FOF has organised.
Fear of the feminine (FOF) has been of interest since the early days of psychotherapy and has been identified as a core aspect of the men's studies, being found in various disciplines.
high load of hundreds fof gallen eans was shed from the jack knifed lorry in the foregrounds.
Data reported here come from the Focus on Families (FOF) field experiment (see Catalano et al., 2002 for a full description of the program).
Focus on the Family (FoF) must comb the world for scientific studies that seem to bolster their faith, because they love to announce that science is on their side.