Page "Fund of funds" Paragraph 4

Management fees for Funds Of Funds are typically higher than those on traditional investment funds because they include the management fees charged by the underlying funds.

As in the case of schemes of mutual funds, FOF schemes also work under the due diligence of a fund manager.

This gives the scheme an additional expertise.

It also helps to provide access to information which may be difficult to obtain information by an investor on a case by case basis.

Every fund manager has a particular style of diversification.

This diversification has a perfect correlation with the number of managers involved.

Once a FOF reached a certain level of managers, adding more flattens return curve and diversifies away alpha ( Harry Prasun Kat2 ).