In the world of finance and investment, a Fund of Funds (FoF) refers to a fund that allocates capital not directly to market instruments, but rather to other funds, including mutual funds, hedge funds, or private equity funds. This structure allows investors to gain diversified exposure to various investment strategies, managers, and asset classes through one single investment vehicle. FoFs typically charge an additional layer of fees to compensate for the investment managers, alongside the fees charged by the underlying funds. They are particularly appealing to institutional investors and high-net-worth individuals looking for diversification and professional management without the need to select individual funds themselves.