What Is A Fund of Funds (FoF)?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise: Investment Banking | Private Equity

A fund of funds is a fairly self-explanatory entity, it is any form of fund (usually mutual) which invests in other funds as a means of diversification. This is essentially one level of risk removed from being a standard fund, as you would assume that the funds the FoF invests in are themselves diversified for reduced risk. The return of a FoF is likely to be lower than could be achieved in a standard fund.

Funds of funds will usually invest into a diverse set of hedge funds and private equity funds in order to attempt to reach high levels of returns.

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Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.