Rising inflation amid the Corona epidemic has had a detrimental effect on people's living standards. In such a situation if you are looking for a scheme to invest money where you get a good return so that you can face inflation then you can invest in the 'Fund of Funds' category of mutual funds. Today we are going to tell you about this category of Mutual Funds.
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First of all understand what is 'Fund of Funds'?
Funds of funds are mutual fund schemes that invest in other mutual fund schemes. But it is not limited to index funds and exchange traded funds (ETFs). By investing in multiple schemes, a fund of funds can give an investor a broad exposure to multiple market segments or strategies and is likely to yield good returns.
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For example, if the fund manager wants to invest in gold he will invest money in a gold scheme investing in gold, the fund manager can do whatever scheme he wants to invest money in. This means that a fund of funds is a mutual fund scheme that invests in other schemes. It is not bound to invest money in any one scheme. Funds of funds do not include shares or bonds of the company, funds of funds hold units of other schemes. A fund of funds can invest in many schemes of its own fund house or other fund houses.
The
biggest advantage of investing in diversifying a portfolio with low investment is small investors who cannot invest in different investment options due to lack of money. They can diversify their portfolio for a small amount through this scheme. The likelihood of making a greater return on investment increases.
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Are there many types of 'funds of funds'?
Funds of funds can be of three types. One who invests in equities. Others who invest money in debt funds. The third is those who invest in the international market. All three types cover almost all asset classes.
Who should invest in this?
Those who want to diversify their portfolio while investing less money in a mutual fund will find it worthwhile to invest in it. Apart from that it is also suitable for people who do not know much about mutual funds, as they have a world class fund manager handling your money. It also lowers your risk.
This 'Fund of Funds' gave a good return
| Name of the Fund | How much return (%) in 1 year | Average annual return (in%) over last 3 years | Average annual return over the last 5 years (in%) |
| ICICI Prudential Advisor Series | 62.9 | 12.6 | 12.9 |
| UTI Nifty Index Fund | 57.6 | 14.8 | 14.8 |
| ICICI Prudential Nifty Index Fund | 56.8 | 14.3 | 14.2 |
| SBI Nifty Index Fund | 56.8 | 14.1 | 14.1 |
| IDFC Nifty Fund | 56.8 | 14.8 | 14.7 |
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