Mutual Fund Or Fund Of Funds: Find Out Which Investment Option Is Better

Mutual fund investors buy partial ownership of a company, while a fund of fund investment attempts to achieve an all-in-one portfolio with proper asset allocation in a diverse variety of fund categories

A mutual fund is a type of investment option where funds from various investors are pooled together and invested in stocks, other money market instruments, and assets. Mutual funds are usually managed by fund managers who allocate the money in order to gain capital and income for the investors. A fund of funds (FOF) is similar to a mutual fund in terms of pooled funds from various investors. A fund of funds portfolio contains various underlying portfolios of funds. How do they work? In mutual funds, when investors invest in securities, they are also buying partial ownership of the company and its assets.