Comments on: Top Mutual Funds http://www.bessed.com/topmutualfunds/ Just another WordPress weblog Thu, 20 Nov 2008 23:22:10 +0000 http://wordpress.org/?v=2.0.4 by: Alex http://www.bessed.com/topmutualfunds/#comment-38197 Tue, 20 Nov 2007 11:48:49 +0000 http://www.bessed.com/topmutualfunds/#comment-38197 If you haven't heard of a fund of funds, you might think it is just a redundancy. The truth is a fund of funds has some important advantages and disadvantages that you need to be aware of. A fund of funds is exactly what it sounds like. It is a mutual fund that invests in other mutual funds. At first it may seem silly to you, but here are some big advantages to investing in a fund of funds: Double Diversification -A mutual fund diversifies across many different stocks. A fund of funds diversifies amongst many different funds. Simplicity -Instead of investing in many different funds to achieve the same result, you can just invest in one fund. This allows for much less paperwork. Cheap for Beginning Investors -It is tough to diversify when starting out because of account minimums. A fund of funds allows for an investor to diversify amongst hundreds or thousands of stocks in one small account. Institutional Advantages -Funds of funds can often invest in desirable institutional funds that are off-limits for retail investors. They also have the ability to invest in some load funds without paying the load. If you haven’t heard of a fund of funds, you might think it is just a redundancy. The truth is a fund of funds has some important advantages and disadvantages that you need to be aware of. A fund of funds is exactly what it sounds like. It is a mutual fund that invests in other mutual funds. At first it may seem silly to you, but here are some big advantages to investing in a fund of funds:

Double Diversification -A mutual fund diversifies across many different stocks. A fund of funds diversifies amongst many different funds.

Simplicity -Instead of investing in many different funds to achieve the same result, you can just invest in one fund. This allows for much less paperwork.

Cheap for Beginning Investors -It is tough to diversify when starting out because of account minimums. A fund of funds allows for an investor to diversify amongst hundreds or thousands of stocks in one small account.

Institutional Advantages -Funds of funds can often invest in desirable institutional funds that are off-limits for retail investors. They also have the ability to invest in some load funds without paying the load.

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