Fund of Funds Explained: Pros, Cons & Investment Strategy | Mutual Funds for Beginners

Fund of Funds Explained: Pros, Cons & Investment Strategy | Mutual Funds for Beginners

In this video of Mutual Funds with Groww, you will learn the advantages and disadvantages of Fund of Funds. These are mutual fund schemes that invest in units of other mutual fund schemes. You will get a clear understanding on where Fund of Funds invest and also if you should invest in Fund of Funds to reach your financial goals.


00:00 – Introduction to Fund of Funds (FOF)
00:04 – What is a Fund of Funds?
00:48 – Overview of mutual fund types (Equity, Debt, Hybrid)
01:07 - What are Fund of Funds?
01:40 - Example of Equity Fund of Funds
02:15 - Thematic Funds in Fund of Funds
02:43 – ETFs and Index Funds in Fund of Funds
03:33 – Types of FoFs - Multi Asset Fund of Funds
04:05 – Passive Fund of Funds and ETFs
04:48 – International Funds of Funds
05:16 – Gold and Silver Fund of Funds
05:32 – Sector-Specific Fund of Funds
06:12 – Advantages: Layer Diversification
07:03 – Risk mitigation with Fund of Funds
07:47 – Access ETFs without a Demat account
08:17 – Access to International Markets
08:34 – Easy rebalancing and tax benefits
09:44 – Disadvantages: Double Expense Ratios
10:28 – Over-diversification and portfolio overlap
10:55 – Lack of flexibility in Fund of Funds
11:24 – Should You Invest in Fund of Funds?
11:51 - Performance of Multi-Asset Funds
12:17 – Funds for higher-risk investors
12:50 – Taxation changes for Fund of Funds
13:21 – Example of capital gains tax
14:01 – Conclusion: Pros and cons of FOF


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