FOF (Fund of Funds) — Mutual Fund Term Explained

A fund that invests in other mutual funds instead of directly in stocks or bonds. Often used for international fund access.

A Fund of Funds (FOF) invests in units of other mutual fund schemes. International FOFs invest in foreign funds to give Indian investors global exposure.

FOFs add an extra layer of expense. Since 2024, most domestic FOFs are taxed as debt funds.

Related terms

• Hybrid Fund — A mutual fund investing in both equity and debt. Middle ground between pure equity (high risk) and pure debt (low risk).
• Index Fund — A passively managed fund replicating a market index like Nifty 50. Ultra-low cost (0.05%). Most active funds underperform over 10+ years.
• Expense Ratio — The annual fee charged by a mutual fund as a % of AUM. Covers management fees, operational costs and commissions. Deducted daily from NAV.

Browse the full mutual fund glossary, or see this concept in action in the fund screener.