Fund of Funds (FOF)

A fund of funds is a fairly self-explanatory entity, it is any form of fund (usually mutual) which invests in other funds as a means of diversification. This is essentially one level of risk removed from being a standard fund, as you would assume that the funds the FoF invests in are themselves diversified for reduced risk. The return of a FoF is likely to be lower than could be achieved in a standard fund.

Funds of funds will usually invest into a diverse set of hedge funds andprivate equityfunds in order to attempt to reach high levels of returns.

Free Resources

To continue learning and advancing your career, check out these additional helpfulWSOresources:

• Retained Earnings
• Fraud Triangle
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• Marginal Cost Formula
• Nash Equilibrium