Funds of funds
What is a fund of funds?
Also known as Multi Manager funds, funds of funds contain an even wider variety of investments than funds. Rather than investing directly in shares, bonds and other assets, they invest in other funds to achieve broad diversification, with a variety of fund categories all wrapped up in one convenient investment.
Why invest in a fund of funds?
- No headache choosing funds – this is done by a full-time fund manager.
- Wide diversification and reduced risk.
- Tap into the expertise of fund managers.
Funds of funds charges
When you’re comparing funds of funds, keep an eye on costs. The flipside of having a manager choosing your funds for you is that there can be operating expenses in addition to the charges for the underlying funds.