Back to Investment Guides

What is a fund of funds?
A fund of funds, as the name suggests, is a fund that predominantly invests in a number of other underlying funds including unit trusts, open ended investment companies (OEICs), exchange traded funds and other collective investment schemes.  This type of fund does not invest directly in stocks and shares as traditional unit trusts do.

The job of a fund of funds manager is to understand fund managers in the same way other fund managers know about shares. He or she will use this expertise to select and access what are believed to be the best performing funds in each asset class and geographical region, and blend these funds together with the aim of producing enhanced returns for investors.

Why choose a fund of funds?
With around 2,000 funds to choose from in the UK alone, researching and making your own investment decisions is no easy task.  Over a relatively short period of time, a year for example, there can be a significant difference in performance between the best and the worst performing funds. Keeping track of changing market conditions and maintaining a balanced portfolio is extremely time-consuming. This is where a fund of funds, such as one of Jupiter's four Merlin Funds of Funds, comes into its own.

Downloads:

 Benefits of Funds of Funds