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A fund of funds represents a mutual fund that invests in other mutual funds. One of the best examples of this type of investment style is the target date fund.
These types of funds are designed to provide a broad based diversification. In target date funds, the portfolio of underlying funds allows the fund manager to shift investments as the fund nears its target date. In a target date fund, a date in the future is selected by the investor that often relates to the year in which they would like to retire. The fund manager shifts the portfolio from aggressive investments to more conservative ones over time.
There are certain things an investor should consider before investing in this type of fund. One, the cost of owning these funds may be higher. These additional fees can be found in the prospectus under "Acquired fund fees and expenses" and should be added into the other fees the fund charges. Two, you must rely on the fund manager to achieve the diversity you want and allocate the assets accordingly. Three, these types of investments may be focused on matching the comparable benchmark rather than beating it.
Carefully read the prospectus before investing, understand your risk tolerance and consider other opportunities such as index funds to meet your goals.
What else can I help you with?
What was the source of wartime funds for the union?
The sale of government bonds was a source of wartime funds for the union.
What is the difference between source of funds and sources of funds?
sources of fund means from where the capital we are getting & source of fund means how we can get the capital.
Why is small business firms could not easily source funds?
why small business firms could not easily source for needed funds
What are sources of remittance?
This can be two things: 1. Originator of funds (i.e. the remitter), the person(s)/entity that initiated the funds transfer, and 2. Source of funds, implying what are the source of funds for the remittance, i.e. where is this money coming from.
What are the Sources and uses of funds in banks?
Deposits as main source of Funds and Loans as main uses of funds in Bank.
Will the bank inquire about the source of your funds?
Yes, the bank may inquire about the source of your funds to ensure compliance with regulations and prevent money laundering.
What is the source of campaign funds?
Private Donations
Where do banks source the funds they use for lending purposes?
Banks source the funds they use for lending purposes from customer deposits, interbank borrowing, and capital reserves.
Where do banks source the funds they use to lend out to consumers?
Banks source the funds they lend out to consumers from a combination of customer deposits, interbank borrowing, and capital reserves.
Is cash a source or use of funds?
Answer:Cash is funds. When activities generate cash, it is said these activities are a source of funds. And, if the activities use up cash, it is a use of funds. Note: in the 'Funds flow statement', working capital is used as a measure of funds, which is a broader definition of funds than cash. For example, working capital increases when inventory increases, but cash would remain unchanged.
What is the source for most of the states operating funds?
Taxes.
Which is the Maine source of campaign funds?
Private donors
