Updated Apr 11, 2021 | 12:05 IST
Since FoFs invest in other mutual fund schemes, investors pay fund management charges for both the underlying funds and the FoF itself. Representational image
New Delhi: Of late many fund houses have launched domestic fund of funds (FoF). But unlike international FoFs the utility of domestic FoFs is not much unless it serves a specific purpose. Investors should take into account the following points before investing in a domestic FoF.
1) High cost: Since FoFs invest in other mutual fund schemes, investors pay fund management charges for both the underlying funds and the FoF itself. For example, in Nippon India Asset Allocator FoF, investors have to pay the expense ratio of the FoF, which is 0.19% and the weighted average expense ratio of its underlying funds Nippon India Small Cap Fund, Nippon India Growth Fund and Nippon India Large Cap Fund- that charge between 1.06% to 1.26% fee per annum. Financial planners say on
Why large-cap funds may not be out of the woods despite their recent outperformance
The category average return dropped below that of the Nifty 100 TRI after the recent rally January 11, 2021 / 09:10 AM IST
Another year gone by. But what a year! The stock market fall blindsided investors just as much as the very rapid recovery. More, the rising market wave lifted most stocks – which means that the market rally was not as narrow as in earlier years.
If there’s one factor that has plagued the large-cap and multi-cap spaces in the past three years, it is that their outperformance over the index has taken a hit. The large-cap category, especially, had very few funds that were able to beat the Nifty 100 index and keep up that performance.
Read more about 60% of large-cap schemes underperform as rejig in weighting hits showing on Business Standard. Polarisation and the increase in index weight of a few a stocks have weighed on performance