Top Fund of Funds (FOFs) in 2025: Benefits and Options

A Fund-of-Funds (FoF) is a type of investment fund that invests in other funds rather than directly in individual securities like stocks or bonds. Essentially, a FoF pools money from investors and allocates it across a portfolio of other mutual funds, exchange-traded funds (ETFs), or hedge funds, depending on the fund’s strategy. Let’s explore some of he best fund of funds, and their performance, along with the benefits and risks associated with them.
Best Funds of Funds in India
Fund Name | AUM(Rs. in cr.) | CAGR 3Y(%) | Expense Ratio(%) | CAGR 5Y(%) | NAV(₹ per unit) | Volatility(%) |
---|---|---|---|---|---|---|
ICICI Pru Bharat 22 FOF | 2265.09 | 28.48 | 0.12 | 35.16 | 32.33 | 16.31 |
ICICI Pru India Equity | 218.81 | 22.31 | 0.63 | 26.65 | 31.61 | 11.64 |
ICICI Pru Thematic Advantage Fund | 5976.7 | 21.38 | 0.3 | 26.64 | 238.11 | 10.13 |
Motilal Oswal Nasdaq 100 FOF | 5631.62 | 35.93 | 0.21 | 21.59 | 47.01 | 24.05 |
ICICI Pru Passive Strategy Fund | 197.84 | 17.85 | 0.15 | 21.14 | 167.89 | 11.59 |
Nippon India Nifty Next 50 Junior BeES FoF | 591.56 | 17.55 | 0.12 | 20.78 | 25.52 | 18.05 |
Invesco India - Invesco Global Equity Income FoF | 98.61 | 29.14 | 0.87 | 20.76 | 34.96 | 16.13 |
Kotak Multi Asset Omni FOF | 1877.08 | 21.24 | 0.33 | 20.72 | 257.34 | 9.42 |
Mirae Asset Diversified Equity Allocator Passive FOF | 950.03 | 15.94 | 0.05 | 19.75 | 24.67 | 13.97 |
Franklin India Dynamic Asset Allocation Active FOFs | 1288.37 | 14.76 | 0.45 | 19.69 | 185.28 | 6.34 |
Disclaimer: Please note that the above list of the best fund of funds is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Mutual Fund Screener and is subject to real-time updates.
Note: The data on the list of the top performing fof is from 1 October 2025. This data is derived from the Tickertape Mutual Funds Screener.
- 5Y CAGR: Sorted from Highest to Lowest
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Overview of the Best Fund of Funds (FoF)
ICICI Pru Bharat 22 FoF
Launched in 2017, the ICICI Pru Bharat 22 FoF invests primarily in the Bharat 22 ETF, which is a collection of 22 major companies in India. These companies come from different sectors like banking, energy, and utilities, providing investors with exposure to key industries in India.
ICICI Pru India Equity
Founded in 2014, the ICICI Pru India Equity Fund invests in a mix of large Indian companies that have a strong presence in the Indian market. It focuses on companies with stable growth prospects in sectors like banking, IT, and energy.
ICICI Pru Thematic Advantage Fund
Introduced in 2014, the ICICI Pru Thematic Advantage Fund follows a thematic investment approach. It focuses on investing in sectors or themes that are expected to benefit from structural growth in the Indian economy, like infrastructure, consumption, and technology.
Motilal Oswal Nasdaq 100 FoF
Launched in 2019, the Motilal Oswal Nasdaq 100 FoF invests in the Nasdaq 100 Index, which includes some of the world’s biggest technology companies. This allows Indian investors to gain exposure to global tech leaders like Apple, Amazon, and Google.
ICICI Pru Passive Strategy Fund
Founded in 2020, the ICICI Pru Passive Strategy Fund aims to replicate the performance of major Indian stock market indices like Nifty 50. It is a passive fund that tracks the market with low fees, providing investors a simple way to invest in the Indian stock market.
Nippon India Nifty Next 50 Junior BeES FoF
Established in 2002, the Nippon India Nifty Next 50 Junior BeES FoF invests in the Nifty Next 50 Index, which includes companies that are likely to be added to the Nifty 50 in the future. This gives investors exposure to emerging large-cap companies.
Invesco India – Invesco Global Equity Income FoF
Launched in 2018, the Invesco India – Invesco Global Equity Income FoF invests in global equity markets, focusing on companies that offer high dividend yields. It provides Indian investors access to income-generating international stocks from developed countries.
Kotak Multi Asset Omni FoF
Introduced in 2010, the Kotak Multi Asset Omni FoF invests across a variety of asset classes like equity, debt, gold, and real estate. By diversifying across different assets, it aims to reduce risk while providing exposure to various sectors and markets.
Mirae Asset Diversified Equity Allocator Passive FoF
Launched in 2021, the Mirae Asset Diversified Equity Allocator Passive FoF invests in a range of domestic and international equity index funds. Its goal is to provide diversified exposure to various equity markets while maintaining a passive investment approach.
Franklin India Dynamic Asset Allocation Active FoF
Founded in 2006, the Franklin India Dynamic Asset Allocation Active FoF dynamically adjusts its investment between equity and debt based on market conditions. This approach helps manage risk and aims for better returns by moving between asset classes as the market evolves.
What is A Fund-of-Funds (FoF)?
A Fund-of-Funds (FoF) or FoFof mutual fund is an investment fund that invests in a portfolio of other funds rather than directly in individual securities like stocks or bonds. Instead of purchasing individual stocks, bonds, or other assets, a Fund-of-Funds pools investor money and allocates it across various mutual funds, exchange-traded funds (ETFs), or hedge funds based on its strategy.
Fund of Funds vs Regular Mutual Funds
Feature | Fund of Funds (FoF) | Regular Mutual Fund |
Where it invests | Invests in other mutual funds | Invests directly in shares, bonds, or money market instruments |
Returns depend on | Performance of the underlying mutual funds | Performance of the securities held in the portfolio |
Structure | A “fund of funds” layer – collects money and allocates it to different mutual funds | Direct structure – money is invested straight into chosen securities |
Diversification | Provides access to multiple funds in one scheme | Diversification depends on the securities selected by the fund manager |
Tax treatment | Taxed like debt or equity FoFs, depending on classification | Taxed as per the category of the fund (equity, debt, hybrid) |
Taxation on Fund of Funds
FoFs in India can be structured as equity, debt, or hybrid, and their taxation depends on the type of assets they hold. Below, we have provided the taxation rules for each category based on the latest taxation format.
Equity Fund of Funds (Equity-oriented FoFs)
Capital Gains | Holding Period | Tax Rate | Notes |
Short-Term (STCG) | Up to 12 months | 20% | Applies if units are sold within 1 year |
Long-Term (LTCG) | More than 12 months | 12.5% (above ₹1.25 lakh, no indexation) | Gains up to ₹1.25 lakh per year are exempt |
Debt / Non-Equity Fund of Funds
Capital Gains | Holding Period | Tax Rate | Notes |
Short-Term Capital Gains (STCG) | Up to 24 months | Taxed as per income tax slab | Applies if sold within 2 years |
Fund of Funds for Long-term(LTCG) | More than 24 months | 12.5% (no indexation) | Applies after 2 years of holding |
Hybrid Fund of Funds
Type of Hybrid FoF | Short-Term (STCG) | Fund of Funds for Long-term(LTCG) | Notes |
Equity-oriented Hybrid FoF (≥65% equity exposure) | 20% if held ≤ 12 months | 12.5% if held > 12 months; gains up to ₹1.25 lakh exempt | Same as equity FoFs |
Debt-oriented Hybrid FoF (<65% equity exposure) | Slab if held ≤ 24 months | 12.5% if held > 24 months (no indexation) | Same as debt FoFs |
How to Invest in Fund of Funds?
You can easily start to invest in the best fund of funds by following these steps:
- To invest in the fund of funds, you can visit an equity investment platform such as smallcase
- The next step is to research and identify the best fund of funds that matches your financial goals. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as returns, expense ratio, and fund size.
- Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose the investment mode, either a one-time lump sum or a 5-year SIP plan, and complete the process.
Types of Fund of Funds in India
- Asset Allocator or Multi-Asset Funds: Invest across different asset classes like equities, debt, and commodities.
- Overseas Fund of Funds: Provides exposure to international markets by investing in global funds.
- Gold Funds: Gold funds are mutual funds primarily trading in gold securities. Depending on the asset management company, a fund of funds in this category may hold a portfolio of mutual funds or gold trading companies.
- ETF Fund of Funds: Investing in an ETF through a fund of funds is more accessible than directly investing in an ETF. This is because ETFs require a Demat trading account while investing in an ETF fund of funds, which has no such limitations.
Features of Fund of Funds (FOF)
- Access to Various Investment Strategies: FoFs may follow different investment strategies. Some funds may invest in equity funds, others in debt funds, or even alternative investments like hedge funds.
- Asset Class Exposure: FoFs provide exposure to various asset classes such as stocks, bonds, real estate, commodities, or even international markets, depending on the underlying funds in the portfolio.
- Higher Fees: One key feature of FoFs is the potential for higher costs. Investors pay the expense ratio of the FoF itself, as well as the fees charged by the underlying funds in which the FoF invests.
Benefits of Investing in the Best Fund of Funds
- Diversification: FoFs invest in a portfolio of underlying mutual funds, which may include equity, debt, gold, or international funds. This structure allows investors to achieve broad diversification across different asset classes and sectors, which mitigates the risk associated with individual investments.
- Access to Specialised Funds: One of the key benefits of a FoF mutual fund is that it provides investors with exposure to specialised funds that they might not have access to individually. For instance, international FoFs offer exposure to global markets, while gold FoFs invest in gold-related assets.
- Simplified Investment Process :Investing in a Fund-of-Funds simplifies the investment process by consolidating multiple fund investments into a single scheme. This approach reduces the complexity of managing multiple investments and helps in maintaining a balanced portfolio
Risks of Investing in the Best Fund of Funds
- Higher Fees and Expenses: FoF mutual funds charge an additional layer of fees on top of the fees charged by the underlying funds in which they invest. The combined fees can reduce returns over time, especially when compared to investing directly in individual mutual funds or ETFs
- Performance Dependency: Since FoFs invest in other funds, they inherit the performance of those funds. If the underlying funds underperform, the FoF will also likely underperform.
- Market Risk: FoFs are still subject to the overall market risk of the asset classes in which they invest, whether those are equities, bonds, or alternative assets. If the market or the sectors that the underlying funds invest in perform poorly, it will also affect even the top FoF mutual funds.
Factors to Consider While Investing in Fund of Funds
- Investment Objectives and Strategy: FoFs can have different investment strategies, such as focusing on equities, debt, international funds, or a mix of asset classes. It’s important to align the FoF’s investment strategy with the financial goals.
- Expense Ratio and Fees: FoF mutual funds typically charge a management fee, in addition to the fees charged by the underlying funds they invest in. That’s why investors need to consider both the FoF’s fee and the fees of the underlying funds.
- Diversification of the Underlying Funds: Analysing the diversification within the FoF can help understand whether the fund has adequate exposure to various asset classes and sectors.
- Performance of the Underlying Funds: The performance of a FoF is largely dependent on the performance of the funds in which it invests. Analysing the past performance of the underlying funds can help understand if these funds align with investment goals and risk appetite.
Who Should Explore the Fund of Funds?
- Investors Seeking Diversification: Investors could consider FoF for portfolio diversification, as these FoF mutual funds invest in multiple asset classes, sectors, or markets without directly investing in each one.
- New or Passive Investors:FoFs provide a simple way to access professionally managed, diversified portfolios without requiring investors to select individual funds or actively manage their investments.
- Investors Seeking Exposure to Niche Asset Classes: Investors who want exposure to specific markets or asset classes, like international equities or gold, could explore FoFs. These FoF mutual funds provide access to niche asset classes, which might be difficult or costly to invest in directly.
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To Wrap It Up…
Fund of Funds (FOFs) offer diversified investment options to suit different objectives. With a unique blend of diversification, professional management, and convenience, this can be an appealing option for investors. However, due to the dependency on underlying funds and layered fees, investors need to do their own research and consider consulting a financial advisor before making any investment decision.
Frequently Asked Questions on Fund of Funds
FoF mutual funds are schemes that do not invest directly in shares or bonds. Instead, they put money into other mutual funds. The performance of these funds depends on how the underlying mutual funds perform, making them a structure of indirect investing through FoF investment options.
There is no single “best” FoF, as each fund is created with a different goal. Some FoFs focus on gold, some on international markets, while others are asset allocation schemes that spread money across equity and debt.
Yes, Indian asset management companies offer a wide range of FoFs across categories like equity-oriented, debt-oriented, and hybrid. These are all part of the mutual fund universe recognised under SEBI’s framework for fund of funds investment.
A Fund of Funds invests in multiple mutual funds, providing diversification but trading only at NAV. An Exchange Traded Fund tracks an index or asset and trades on stock exchanges like shares. So when it comes to the better options between these two, it depends on investment strategy, goals and risk tolerance of the investors.
FoFs are a category of mutual funds in India where the money collected from investors is invested in other funds. They are structured by AMCs for specific objectives like global exposure, asset allocation, or commodity-based investing.
The tax on Fund of Funds (FoFs) depends on whether it is equity-oriented or debt-oriented.
–Equity FoFs: If sold within 12 months, gains are taxed at 20%. If held for more than 12 months, gains above ₹1.25 lakh in a year are taxed at 12.5% (no indexation).
–Debt FoFs: If sold within 24 months, gains are taxed as per your income tax slab. If held for more than 24 months, gains are taxed at 12.5% (no indexation).
This applies to different FoF investment options based on how they are structured.
A Fund of Funds collects money from investors and allocates it into selected mutual funds, which can be domestic or international. The returns of the FoF depend on the combined performance of these underlying schemes. These are structured with a long-term FoF investment strategy, such as FoF for retirement planning or portfolio diversification.
In India, a Fund of Funds (FoF) is a mutual fund that invests in other mutual funds instead of directly holding shares or bonds. For example, some FoFs are designed to invest in international equity or debt mutual funds, which gives them exposure to global markets through the structure of FoF mutual funds.
There are no FoF schemes that can be called completely low risk, as all mutual funds are influenced by market factors. However, investors can do their own research using the Tickertape Mutual Fund Screener, which comes with more than 50 preloaded filters to study and compare different options, and find top-performing FoFs.