Clone Fund

Clone fund is a term in finance for mutual fund that is set up to replicate an earlier larger and successful mutual fund, both in strategy and performance. A mutual fund company sets us clone fund when an earlier fund becomes too large to be managed efficiently. Thus, one of the aims is also to have a smaller fund so that it can be managed with greater ease than the bigger one.

Clone funds in Canada are, however, different. The term is used in that country to refer to the funds that uses derivatives to bypass the foreign content restrictions previously existed in retirement accounts.