In the context of Fund of Funds, Fettered funds are those where the manager can only select funds within their same management company.
Unfettered funds allow the manager to choose from any fund available in the market, regardless of the management company.
It is important to recognise the differences between the two, as it impacts the range of investment options available and the potential for diversification.
Unfettered funds generally offer more flexibility and opportunities for finding the best-performing investments as there are no company-based limitations.
On the other hand, Fettered funds might benefit from lower fees or better integration within the managing company.
Choosing the right type will be subject to the individual investor, and it is important to ensure the decision is aligned with their strategy and goals.