Ch.3 · Sponsor, Trustee and AMC Roles · hard
What is a 'Fund of Funds' (FoF) structural consideration under the mutual fund framework?
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EXPLANATION
A Fund of Funds (FoF) operates within the same three-tier mutual fund structure (sponsor, trust, AMC) as regular schemes. The key structural consideration is double expense loading — the FoF bears its own TER plus indirectly bears the TER of underlying schemes. SEBI has capped the additional TER that a domestic FoF can charge over the underlying scheme's TER to protect investors.
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