About FoF Domestic Mutual Funds
A Fund of Fund (FoF) is an investment strategy of holding a portfolio of other investment funds instead of investing directly in stocks, bonds or other securities. This kind of scheme mainly invests in the units of another mutual fund scheme. In the case of FoF Domestic Funds, FoF mainly makes investments in other funds that focus on domestic markets, which in this context would typically refer to a specific country's stock and bond markets. These funds allow investors to invest in domestic markets. Domestic FoFs have various investment objectives, such as capital appreciation, income generation, or a combination of both, depending on the specific fund's goals.
How FoF Domestic Fund Works?
FOF domestic funds come in many configurations as they primarily invest in line with their investment objective, which varies across schemes. Depending on the objective, the scheme may invest in equity funds, debt funds, hybrid funds or a combination of these.
Features of FoF Domestic Mutual Funds
- Diversification: Domestic FOFs primarily make investments in various domestic mutual funds, which can help reduce risk.
- Convenience: These funds are a one-stop shop for investors who want to invest in a variety of mutual funds.
- Professional management: Domestic Fund of Funds are managed by experienced fund managers who have the expertise to select and manage a portfolio of mutual funds.
Advantages of Investing in FoF Domestic Funds
- Easy Rebalancing: Rebalancing is essential when it comes to managing your investment portfolio. It could be necessary for you to sell some investments and buy others in order to rebalance your portfolio based on the performance of the underlying assets. If you sell investments in this situation, you can be obliged to pay capital gains tax.
- Diversification: The main benefit of FoFs is that they allow investors to access a variety of mutual funds with various investment objectives with just one investment.
- Transparency: Domestic FOFs are required to regularly declare their portfolios. Investors can now view the mutual funds in which the FOF has invested as well as the amount invested in each fund. This can assist investors in making knowledgeable choices regarding whether or not to invest in a specific FOF.
Risk Involved in FoF Domestic Funds
- Market risk: These funds mainly invest in the securities of markets. The markets are volatile in nature, which leads the fund to market risk.
- Manager risk: The fund manager's expertise affects how well a FOF performs. The performance of the FOF may deteriorate if the fund manager’s strategy of investment does not work.
Factors To Consider Before Investing in FoF Domestic Funds
- Investment Objective: You should make sure that your investment objective matches with the scheme’s. For instance, if you are looking to park your funds for emergencies, FoF is not an ideal fund. This is better suited for objectives like long-term wealth creation.
- Risk Tolerance: Before investing in the scheme, always check the level of risk associated with the scheme and your risk tolerance as well. For instance, if you have a low risk tolerance, this may not be an ideal investment for you.
- Investment Horizon: FOFs are best suited for long-term investors. Hence, it is prudent to check your investment horizon.
Who Should Invest in FoF Domestic Mutual Funds?
Domestic FOFs can be a suitable investment option for numerous investors such as:
- New investors: These mutual funds are a good way for new investors to get started with mutual funds. Domestic FoFs help investors easily access a diversified portfolio of mutual funds, which can help reduce risk.
- Investors with limited time: If you are an investor not looking to do independent research and select individual mutual funds, then it is a good option.
- Investors who like diversification: FOFs are allowed to invest in a variety of asset classes, such as equity, debt, and gold. As a result, this can help investors to diversify their portfolios and reduce risk.
Taxability of FoF Domestic Funds
As per the new tax rules that took effect on April 1, 2023, the Fund of Funds are considered non-equity funds, irrespective of the equity holdings in the scheme. Hence, the FoF Domestic Funds gains are added to the investor's income and taxed as per their income tax slab.
How To Invest in FoF Domestic Funds?
Investing in the FoF Domestic Funds is an easy process when you do it through your Angel One account. Just follow these simple steps: Step 1: Log in to your account on Angel One. Note: In case you are yet to open an account with Angel One, open a free demat account with us within a few minutes by submitting the relevant documents. Step 2: Find a FoF Domestic Fund that suits your needs and risk profile. You can learn more about the Flexi Funds on the Angel One app. Things to do at this stage are:
- Search for the fund you want to invest in based on your preference.
- Analyse the fund’s past performance, tax impact, future potential, etc. You can calculate the potential returns using the mutual fund returns calculator.
- Evaluate the fund’s level of risk, its ratings, lock-in period and expense ratio.
Step 3: Once you decide which FoF Domestic Fund you want to invest in, open your Angel One account, go to the Mutual Funds section, and buy the mutual fund’s units. The steps involved are:
- Decide whether you want to invest via SIP or a lump sum one-time investment.
- Choose a monthly SIP date. Enter the amount you want to invest and choose your preferred payment mode.
- After placing the order, you can create an AutoPay to make hassle-free future instalments in case of SIP investments.
Top 10 FoF Domestic Mutual Funds to Invest in
The following are the top FoFs Domestic Funds in India:
| Name | AUM (₹ Crore) | CAGR 3Y (%) | 1Y Returns (%) | Expense Ratio |
| ICICI Prudential Bharat 22 FOF | 2,499.64 | 28.58 | 29.85 | 0.12 |
| Mirae Asset Nifty India Manufacturing ETF FoF | 112.42 | 23.75 | 23.55 | 0.07 |
| Nippon India Nifty Next 50 Junior BeES FoF | 661.07 | 21.99 | 17.04 | 0.12 |
| ICICI Prudential Diversified Equity All Cap Omni FOF | 262.52 | 21.71 | 14.63 | 0.45 |
| Aditya Birla Sun Life Multi - Asset Passive FoF | 26.96 | 20.36 | 19.97 | 0.28 |
| ICICI Prudential Thematic Advantage Fund | 8,693.30 | 19.11 | 12.26 | 0.21 |
| Motilal Oswal Asset Allocation Passive FoF-Aggressive | 136.5 | 18.67 | 19.42 | 0.05 |
| ICICI Prudential Multi Sector Passive FOF | 218.06 | 18.21 | 16.01 | 0.31 |
| ICICI Prudential Nifty Alpha Low - Volatility 30 ETF FOF | 861.83 | 17.53 | 9.26 | 0.1 |
| Aditya Birla Sun Life Dynamic Asset Allocation Omni FOF | 229.7 | 17.2 | 15.88 | 0.29 |
Note: The data is as of February 2026, with funds ranked by the highest 3-year CAGR among FoFs Domestic Mutual Fund schemes.
ICICI Prudential Bharat 22 FOF
The ICICI Prudential Bharat 22 FOF is an open‑ended fund of funds scheme focused on achieving long‑term capital appreciation by investing predominantly in units of the BHARAT 22 ETF. Managed by Nishit Patel, Ajay Kumar Solanki, Ashwini Jemin Bharucha and Venus Ahuja, the fund targets exposure to a diversified basket of 22 CPSE and public‑sector linked companies across multiple sectors.
It is benchmarked against the S&P BSE Bharat 22 TRI. The scheme carries no exit load.
Mirae Asset Nifty India Manufacturing ETF FoF
The Mirae Asset Nifty India Manufacturing ETF FoF is an open‑ended fund of funds scheme focused on achieving long‑term capital appreciation by investing in units of the Mirae Asset Nifty India Manufacturing ETF. Managed by Ekta Gala and Vishal Singh, the fund targets opportunities across India’s manufacturing‑driven segments based on the Nifty India Manufacturing Index.
It is benchmarked against the Nifty India Manufacturing TRI. An exit load of 0.5% applies if redeemed within 3 months.
Nippon India Nifty Next 50 Junior BeES FoF
The Nippon India Nifty Next 50 Junior BeES FoF is an open‑ended fund of funds scheme focused on achieving long‑term capital appreciation by investing in units of the Nippon India ETF Nifty Next 50 Junior BeES. Managed by Himanshu Mange, the fund targets growth opportunities across the Nifty Next 50 universe of emerging large‑cap companies.
It is benchmarked against the Nifty Next 50 TRI. The scheme carries no exit load.
ICICI Prudential Diversified Equity All Cap Omni FOF
The ICICI Prudential Diversified Equity All Cap Omni FOF is an open‑ended fund of funds scheme focused on achieving long‑term capital appreciation by investing predominantly in active and passive equity schemes across large‑cap, mid‑cap and small‑cap segments. Managed by Dharmesh Kakkad, the fund targets diversified opportunities spanning India’s multi‑cap equity universe.
It is benchmarked against the S&P BSE 500 TRI. An exit load of 1% applies if redeemed within 12 months.
Aditya Birla Sun Life Multi‑Asset Passive FoF
The Aditya Birla Sun Life Multi‑Asset Passive FoF is an open‑ended fund of funds scheme focused on achieving long‑term capital appreciation by investing in passively managed ETFs and index funds across equity, debt and commodity segments. Managed by the Aditya Birla Sun Life AMC team, the fund targets a blended multi‑asset opportunity set driven by India’s broader market indicators.
It is benchmarked against the Nifty 500 TRI. An exit load of 0.5% applies if redeemed within 15 days.
ICICI Prudential Thematic Advantage Fund
The ICICI Prudential Thematic Advantage Fund is an open‑ended fund of funds scheme focused on achieving long‑term capital appreciation by investing in sectoral and thematic schemes across diverse themes. Managed by Dharmesh Kakkad, the fund targets high‑conviction thematic opportunities across multi‑sector equity themes.
It is benchmarked against the NIFTY 200 TRI. An exit load of 1% applies if redeemed within 1 year.
Motilal Oswal Asset Allocation Passive FoF – Aggressive
The Motilal Oswal Asset Allocation Passive FoF – Aggressive is an open‑ended fund of funds scheme focused on achieving long‑term capital appreciation by investing predominantly in passive equity, debt and international ETFs based on a strategic aggressive asset allocation. Managed by Bhalchandra Shinde and Rakesh Shetty, the fund targets multi‑asset opportunities across domestic and global markets.
It is benchmarked against a customised multi‑asset benchmark. An exit load of 1% applies if redeemed within 15 days.
ICICI Prudential Multi Sector Passive FOF
The ICICI Prudential Multi Sector Passive FOF is an open‑ended fund of funds scheme focused on achieving long‑term capital appreciation by investing in passive domestic sector‑based equity ETFs. Managed by Sankaran Naren, Dharmesh Kakkad, Sharmila D'Silva and Masoomi Jhurmarvala, the fund targets diversified opportunities across multiple thematic and sectoral ETF exposures.
It is benchmarked against the NIFTY 200 TRI. An exit load of 1% applies if redeemed within 15 days.
ICICI Prudential Nifty Alpha Low‑Volatility 30 ETF FoF
The ICICI Prudential Nifty Alpha Low‑Volatility 30 ETF FoF is an open‑ended fund of funds scheme focused on achieving long‑term capital appreciation by investing in units of the ICICI Prudential Nifty Alpha Low‑Volatility 30 ETF. Managed by Nishit Patel, Ashwini Bharucha and Venus Ahuja, the fund targets a rules‑based factor‑driven opportunity set balancing alpha and low volatility across the Nifty Alpha Low‑Volatility 30 universe.
It is benchmarked against the Nifty Alpha Low‑Volatility 30 TRI. The scheme carries no exit load.
Aditya Birla Sun Life Dynamic Asset Allocation Omni FoF
The Aditya Birla Sun Life Dynamic Asset Allocation Omni FoF is an open‑ended fund of funds scheme focused on achieving long‑term capital appreciation by dynamically allocating across equity, debt and ETF schemes. Managed by Aditya Birla Sun Life AMC’s fund management team, the fund targets balanced risk‑adjusted opportunities across changing market cycles.
It is benchmarked against the CRISIL Hybrid 50+50 Moderate Index. An exit load of 1% applies if redeemed within 365 days.
