The case for investing in Fund of Funds By Andrew Ludwig* The pandemic and resultant market roller coaster was a red flag for risk-averse investors who do not cope well with extreme market volatility, a hallmark of most of 2020. We recently interviewed the fund managers at New Road Capital and Flagship Asset Management to discuss the Fund of Funds investment approach, a strategy that has been shunned for its fees, but should not be forgotten for its intended purpose of diversification. A Fund of Funds, also referred to as a multi-manager investment, is a pooled investment fund that invests in other funds, typically other mutual funds. The portfolio essentially contains different underlying portfolios of other funds affording greater diversity and reduced risk.