Published : June 19, 2021
Fund of Funds (FOFs) is a mutual fund scheme that utilizes its pool of resources to invest in other different kinds of mutual funds available in the market. More importantly, investment in hedge funds can also be made by this kind of mutual fund. The portfolio is designed keeping in mind both small and large investors so anyone can invest their money in these types of funds. Let’s understand in detail about FOFs in this article.
The Investors of Fund of Funds: The main goal of FOFs is to provide maximum returns by investing in various portfolios which have minimal risk. It is advised by experts for any individual who look for better returns with the minimum risk associated with the investment. FOFs include a variety of mutual funds which includes high-value mutual funds also.
Advantages of Fund of Funds: The fund of funds enables you to have various advantages. Let’s discuss them one by one.
Limitations of Fund of Funds: FOFs have some limitations too. Let’s discuss.
Investment in Fund of Funds is the right choice for investors as it put your money in the best of best mutual funds. Although, investors are advised to look at other factors such as the lock-in period. The returns are better in FOFs as compare to MFs however; investors shouldn’t expect very much difference in returns.
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