What type of fund allows a client to own units in several mutual funds with a specified allocation?

The concept of a fund of funds is designed specifically to allow investors to gain exposure to multiple mutual funds within a single investment vehicle. This arrangement provides clients with a diversified investment portfolio, as they can invest in various funds that might focus on different asset classes or markets without needing to manage each mutual fund separately.

In a fund of funds, a manager typically allocates the investment across various underlying funds based on specific criteria or investment objectives. This setup is particularly beneficial for investors who want to achieve diversification and professional management while maintaining simplicity in their investment strategy. The specified allocation helps to align with the client's risk tolerance and investment goals, making it an efficient choice for those seeking a holistic investment solution.

Other options, while related to investing, serve different purposes. A fund wrap is more about packaging multiple investment products together with a single fee structure. A portfolio allocation service typically involves more personalized management based on the individual client's risk profile and investment objectives. Target-date funds are designed to automatically adjust their asset allocation as the target date approaches, primarily focusing on retirement planning, rather than providing an ongoing allocation to multiple mutual funds. Thus, the unique structure and benefits of a fund of funds clearly define its role in investment management.