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Why a Fund of Funds?

Many funds-of-funds aim to be an all-in-one-investment that can help you reach your long-term goals. When you own a fund-of-funds, you own a portfolio of funds that is built, monitored and managed by experienced money managers.

You don’t have to remember to rebalance your portfolios; it’s done for you. At tax time, you only have to worry about year-end distributions from your fund-of-funds, not the income or gains distributed by the underlying funds your fund-of-fund owns. And you didn’t have to meet an advisor’s high minimum investment; most funds-of-funds can be purchased for as little as $2,500.

With more than 1300 funds-of-funds available today, which fund-of-fund should you choose? Here are three questions to consider:

1. Is your fund-of-funds limited to one fund family?

Most major fund companies have funds-of-funds, but these typically invest in funds from their own fund family (these are called “fettered” funds). Other funds-of-funds, like the Upgrader Funds, can invest in whichever funds or ETFs their managers deem best. These “unfettered” funds-of-funds aren’t limited to any one fund family, which means that they can take advantage of opportunities from many different funds and ETFs.

2. Does your fund-of-fund actively respond to changing markets?

Many of the funds-of-funds available today have static allocations to large- and small-cap funds or domestic and foreign funds, but this can hurt in years like 2015, when most foreign markets did poorly. The Upgrader Funds are designed to change their portfolios in response to changing markets.

3. Can you talk with your fund manager?

Here at FundX, you can call us at 1-800-763-8639 and ask to speak with a portfolio manager. As a shareholder of the Upgrader Funds, we’re here to answer your questions and help you determine how you can use the Funds to reach your goals. 

 

 

 

 

 

 

 

 

Any tax or legal information provided is a summary of our understanding and interpretation of some of the current income tax regulations. Investors must consult their tax advisor or legal counsel for advice and information concerning their particular situation. Neither the Fund nor any of its representatives may give legal or tax advice.

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