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	Hedge Funds Fund of Funds No Load Mutual Funds Earn Big Returns On Your Investment Using A Well-Known, But Little-Understood No-Load Mutual Fund Strategy. Angel Investor Arbitrage Depository Receipts Emerging Markets Long or Short Equity Fund of Funds Comparison to Mutual Funds Comparison to Private Equity Hedge Fund Regulation Hedge Fund Risk Arbitrage Hedge Fund Strategies Venture Capital Fund of Funds or FoF is a type of investment fund that uses an investment strategy of holding a portfolio of other investment funds instead of investing directly in shares, bonds or other securities. This type of investing is often termed as multi-manager investment. There are different types of fund of funds based on the different types of collective investment schemes they investing in, which is typically one type per FoF. For example: mutual fund FoF, hedge fund FoF, investment trust FoF etc. Pros and Cons of Fund of Funds These funds have been designed to achieve far greater diversification than traditional collective investment schemes. On the other hand, management fees on fund of funds are relatively higher compared to those on tradition investment funds since they include a portion of the management fees charged by the underlying funds that they deal with. Since a fund of funds buys many different types of funds which themselves invest in many varied types of stocks, it is possible that the fund of funds will end up owning the same stock through several different funds and hence it can become difficult to keep track of the overall holdings. Funds of funds are often used while investing in hedge funds, since they typically have a high minimum investment level as compared to traditional investment funds, which prevents many form investing directly in these funds. In addition to this, hedge fund investing is more complicated and involves a higher risk as compared to traditional collective investments. This lack of accessibility favors a FoF which has a professional manager and a built in provision to spread any risk that might be involved. For this reason, pension funds and other institutions often invest in funds of funds for part or all of their alternative asset programs, which are investments other than traditional stock and bond holdings.