a strategy of investing in different types of assets to reduce risk. By diversifying a fund portfolio among several investment classes, it is likely that the values of some investments will be rising while others are falling, but the NAV of the portfolio will grow in a moderate, stable way.
[...] Fans of FoFs support them because are low risk Risk is spread by the broad investment strategy followed by all funds. With FoFs the risk-spreading process operates on two levels. FoFs also have attractions because the net is spread so wide that any well-performing stock market should have an influence on the returns won by the FoF. [...]