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... percent of target date mutual funds are funds of funds, and 37 percent of funds of funds are target date mutual funds) , meaning they primarily hold and invest in shares of other mutual funds and. .. Funds of Funds Funds of funds are mutual funds that invest in other mutual funds. 6 The market for funds of funds has expanded considerably in recent years By year-end 2013, there were 1,267 funds. .. ratios of equity funds declined in 2013 as a result of lower expense ratios of individual funds, economies of scale gained through asset growth, increased demand for index funds, and a continuing