Invest in different securities of the Fund at the same time who sets his capital in a Fund of funds, at the same time invested in various securities of the Fund. While investors benefited from a broader diversification, which means a lower risk of loss. Perhaps check out Andreessen Horowitz for more information. The double cost of the management of the Fund and the management of the target funds detrimental to however. Ben Horowitz: the source for more info. The stock market news portal boersennews.de explains the form of investment. Called a Fund of funds, also Fund of funds”, is mainly used to invest in promising funds and less to create a good portfolio of stocks.

This is invested in funds of a predetermined investment focus in so-called target Fund. These can be global fund, land fund or region funds. According to the economic lexicon by boersennews.de of apply funds in General as a relatively low-risk. However, there are riskier and less risky forms of Fund of funds. Is, for example, primarily invested in equity funds, is a greater risk of loss than in investing in pension funds. The type of funds recognizable to “” do, are those who invest in stock funds, with the additional chance “or growth” marked. The Fund of funds, which mainly invest in bond funds carry defensive turn nicknamed”or security”.

Most importantly, that no conclusions on guarantees for the future will be closed because of past profits. Both forms of the funds carry still a certain risk. So it can happen, for example, that investors put on a Fund of funds, which target funds invest in the same stocks. The diversification is no longer what is referred to as risk concentration.