Funds of Funds

Dear All:

could you please give some examples about the concept of " Funds of funds". I am so confused about this terms.

Thank you so much for your your time.


Funds of funds are similar to asset allocation mutual funds where instead of investing directly in individual assets the fund of funds manager allocates capital to a variety of strategies/managers. For example, were it not for fund of funds, if you had $100k to invest in alternatives you would likely be limited to putting it all in one strategy due to minimum investment requirements. Investing in a fund of funds gives you access to multiple managers and exposure to multiple strategies at the same dollar level of investment.


Fund A - Invest in mature stocks

Fund B - Invest in growth stocks

Fund C - Invest in commodities

Fund D - Invests in Fund A, Fund B, & Fund C

Fund D is Fund of Funds.