Question of the Week: What are fund-of-funds mutual funds?

Submitted by nsscadmin on Wed, 03/03/2021 - 09:00

In the latest part of our series looking at different types of mutual funds we look at fund-of-funds. Simply put, these types of mutual funds invest in other mutual funds or hedge funds. An investor investing in fund-of-funds is trying to build a broadly diverse portfolio and spread out asset allocation by investing in a variety of funds types in one. It’s possible that by investing in one fund-of-funds, an investor could invest in all of the mutual fund types we’ve outlined in our series. A more diverse portfolio also reduces risk as an investor will not be as affected by market volatility.

Along with the added reach of fund-of-funds come additional and typically higher fees. If investing in fund-of-funds be sure that the additional fees don’t overly impact your returns and your access to a more diverse portfolio.

The Nova Scotia Securities Commission does not provide investment advice. We are not advising or recommending that investors purchase the mutual funds in our posts. The posts are simply to educate investors so they can be an informed investor when making investment decisions.

Failure to file annual financial statements.
Failure to file interim financial statements.
Failure to file an annual or interim management’s discussion and analysis (MD&A) or an annual or interim management report of fund performance (MRFP).
Failure to file an Annual Information Form (AIF).
Failure to file a certification of annual or interim filings required by Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (MI 52-109).
Failure to file required proxy materials or a required information circular.
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Failure to file a business acquisition report.
Failure to file annual oil and gas disclosure prescribed by National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities (NI 51-101) or technical reports for a mineral project required under NI 43-101 Standards of Disclosure for Mineral Projects (NI 43-101).
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Failure to file audit committee disclosure as required by Multilateral Instrument 52-110 Audit Committees (MI 52-110) or BC Instrument 52-509 Audit Committees.
Failure to include disclosure in an issuer’s MD&A relating to disclosure controls and procedures and their direct effectiveness that is referred to in a certificate filed under MI 52-109.
Financial statements of the reporting issuer, or the auditors’ report accompanying the financial statements, do not comply with the requirements of NI 51-102 Continuous Disclosure Obligations (NI 51-102), National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) or National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency (NI 52-107).
The reporting issuer has acknowledged that its financial statements, or the auditors’ report accompanying the financial statements, may no longer be relied upon.
The reporting issuer’s AIF, MD&A, MRFP, information circular, or business acquisition reports do not contain information for each of the content items required by NI 51-102 or NI 81-106.
The reporting issuer’s technical disclosure or other reports do not comply with the disclosure requirements of NI 43-101 or 51-101.
Failure to pay a fee required by the Act or the regulations.
Failure to comply with any other requirement related to continuous disclosure.