A Funds of Funds(FOF) is a type of multi manager investment is a pooled fund which invest in other funds. ie: Its portfolio contains different types of funds in different weights according to the risk appetite of the user. For example FOF can invest in different mutual funds or Hedge funds or can contain a combined portfolio of both of these funds. By doing this FOF aims at broader diversification and thus mitigating the risks

A Family of Funds means all the different types of mutual funds managed by a single firm or investment company. People invest in different funds of the same investment firm to obtain lower transaction charges and fees associated to it. Also there is a convenience factor to the investors. These can include funds of different risk reward levels and payoffs.