A fund that invests only into another mutual fund (called the underlying fund).

These are useful in part because small investors may not be willing to meet the minimum investment required by a mutual fund; a mirror fund might allow many small investors to lump their funds, and thus meet the minimum requirement. If a number of funds are mirrored, this may also be used in much the same way as is a family of funds.

They have also been used in some tax dodges, although such use is over my head.

Mirror funds are often set up as an investment option by insurance companies and investment advisers. They are often set up to allow small, monthly investments, and are usually not used by people investing large amounts of funds or serious investors.

Compare to a fund of funds, where a (often much larger) investment is split between many different mutual funds.

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