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Fund of funds can be used to balance your portfolio

 

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 
THERE are several options available for investors within the mutual fund fold; so, the choice in front of them is massive. But, they also need to look at what are their exact requirements and how they can actually ensure that these are met through the various options available. One such choice that is often ignored by the investors is that of fund of funds.

This concept, in India, has not worked out well in terms of mass popularity, but that does not mean that the investors who need to take a careful look at the position here should ignore this.

Nature: Fund of funds are a type of scheme that is offered by the mutual funds, wherein, they invest into other funds, so the holdings of the scheme consists of other mutual funds. The manner in which the other funds are selected depends upon the strategy that is determined by the fund.

The other thing is that there is a lot of variation when it comes to these funds because one can find funds with different characteristics within the fold.

This can range from pure equity funds to those having a mixture of debt and equity and even funds that select holdings from different fund houses to construct the overall portfolio.

This means that the investor should not look at the fund of funds as a single investment but should consider this as a slice of their portfolio.

Asset allocation: One of the reasons why this type of fund can be considered for the portfolio is that it enables making an asset allocation decision. Often, it is difficult for the individual investor to construct their portfolio with a specific type of asset allocation.

This happens due to the fact that there are a lot of funds that need to be taken into consideration and completing the process from this wide choice is not something that is very easy for the individual.

There is also some trouble for investors once the initial investment is made, as the maintenance of the required asset allocation figure could be difficult.

This could actually be done for them by the fund of funds in a simple way.

Choice: Initially, when this category was introduced, there used to be some restriction for investors, as they would have investments within a single fund house. So, the end holdings would constitute funds from a single fund house, which might not give the best results for the investors. Now, there are lots of funds that actually invest in the schemes of other fund houses changing the entire dynamics of the situation. The investor gets the best or the specific choice that they would actually want for their investments and not something that is forced upon them due to the lack of choice.
Measure up: There is a cost that has to be paid by the investor when they are getting this kind of facility in the form of higher indirect expense while making actual investment in the fund of funds.

Here, the cost of the direct holding as well as the indirect holding of various funds comes into the picture. However, this has to be seen in the context of the savings in time and effort that is gained by avoiding multiple investments.


Due to this reason, there are a lot of situations when the cost is reasonable in terms of the benefits provided, needing a proper evaluation.
 

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Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

 

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

 

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

 

These Application Forms can be used for buying regular mutual funds also

 

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

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How to apply to REC Bonds?

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