Understanding FoFs
Ratin DSIJ / 30 Apr 2026 / Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Letters to Editor, MF - Letter to Editor, Mutual Fund
The recent story on international mutual funds was very insightful.
The recent story on international Mutual Funds was very insightful. However, I’m not familiar with the ‘FoF category’ mentioned in the table. Could you please explain what it means? - Ritu Sharma [EasyDNNnews:PaidContentStart]
Editor Responds : A Fund of Funds (FoF) is a mutual fund that invests in other mutual fund schemes rather than directly in stocks or bonds. In the context of international investing, FoFs typically invest in overseas mutual funds or ETFs, giving investors exposure to global markets without needing a foreign trading account. One key advantage is convenience and diversification, as professional fund managers select and manage the underlying funds.
However, FoFs may involve an additional layer of costs, since investors indirectly bear the expenses of both the FoF and the underlying fund. Hence, while FoFs can be a useful addition to your portfolio, their allocation should be limited.
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