Fund of funds
Market basicsAlso called: Feeder fund, FoF
A scheme that invests in units of other mutual fund schemes rather than in securities directly.
In plain terms
It holds units, not shares, so it cannot meet the ordinary equity-oriented test; the separate route for it needs ninety per cent into an exchange-traded scheme that itself holds ninety per cent in domestic listed equity. A feeder into an ordinary index fund gives you identical exposure in a different tax bucket, and charges two layers of expense to do it.