Fund of Funds

[swama694]

Can anybody give me how good is optimix and kotak funds of fund.

I seen positive things as it diversify funds across different amc
and portfolio rebalancing will not loose short term tax and no entry load if we invest to amcs through fund of funds

-ve s

expense of .75 on top of expenses to underlying mutual funds. but for an extent its negligile difference as fund of funds act as an institutional investor which carries less expense.


but most drawback is it is not exempt from long ter capital gains tax. but for those who have no Income in india, think this can be got back by filing tax returns.

So as a whole i felt its good for NRI who cant always monitor portfolio and who dont have other sources of income in india to get tax exemption

so if my veiws are correct can anybody tell which will be the best fund of funds

 

[Vicky78]

Personally I am not very keen on Fund of Funds

1. Double Expense
2. FOF invests in funds of the same fundhouse. So that loses the flexibility of investing in various funds to create an optimal portfolio.

 

[swama694]

hi


ya I agree on the fact that expense is high.....but remember fof will act as an institutional investor and so forth expense is less. so over all expense will be .75% more than directly defining a portfolio.

but there are kotak fof and optimix fof which invest in difernt amcs.

but it is not exempted from 0 longterm gains tax if held for more than 1 year.

But even .75 expense ratio is much high for a long term investor.

And the multimanager schemes led to investing in same scrips through almost same style funds.

BUt if u have a little time to investigate on mutual funds and a day to spend for filling application forms and visiting cams offices then go for direct self selection of funds.

 

[gabbar.singh]

hi


ya I agree on the fact that expense is high.....but remember fof will act as an institutional investor and so forth expense is less. so over all expense will be .75% more than directly defining a portfolio.

Why not create your own F of F by replicating one of the FoFs portfolio? Kotak FoF and Optimix FoF publish their holdings on value research. Just invest in the ratio they do and exit when they exit. With entry load gone, you can easily move from one fund to other. There is still some exit load compelling to hold from 3 to 12 months.