| If you haven't heard of a fund of funds, you | | | | diversifies amongst many different funds. |
| might think it is just a redundancy. The truth is a | | | | Simplicity -Instead of investing in many different |
| fund of funds has some important advantages | | | | funds to achieve the same result, you can just |
| and disadvantages that you need to be aware of. | | | | invest in one fund. This allows for much less |
| A fund of funds is exactly what it sounds like. It is | | | | paperwork. |
| a mutual fund that invests in other mutual funds. | | | | Cheap for Beginning Investors -It is tough to |
| At first it may seem silly to you, but here are | | | | diversify when starting out because of account |
| some big advantages to investing in a fund of | | | | minimums. A fund of funds allows for an investor |
| funds: | | | | to diversify amongst hundreds or thousands of |
| Double Diversification -A mutual fund diversifies | | | | stocks in one small account. |
| across many different stocks. A fund of funds | | | | |