Are fund of funds (FOF) good investments? Should i invest in fund of funds?Asked
Like the name suggests, a Fund of Funds (FOF) is a mutual fund that invests in other mutual funds. Also referred to as a multi manager investment, a FOF invests in a portfolio that has different underlying assets instead of investing directly in stocks, bonds and other securities.
Some features of FOFs are:
A fund of funds (FOF) is an investment strategy in which a fund invests in other types of funds. It is also referred to as a multi manager investment. In this strategy, instead of investing directly in bonds, stocks and other types of securities, investment is done in a portfolio that contains different underlying assets
Advantages of fund of funds are:
Thus, yes these funds are good investments but they have high fees. At the time due diligence is required by choosing these funds. The past performance of the fund and management should be considered