Fund of Funds: Chintan Haria of ICICI Prudential shares his views

Mutual funds put investors’ money in equity or debt instruments based on the type of funds you select but do you know that there are also funds that invest in other mutual funds? Chintan Haria, Head- Product Development and Strategy at ICICI Prudential AMC shared key insights with Money9 on what are Fund of Funds and why it makes sense for first-time investors to invest in Fund of Funds.

“Fund of Funds (FoFs) are those funds which invest in other mutual funds. It creates a solution for those investors who cannot decide which mutual fund should they invest in”, he said.

While there are various kinds of fund of funds available, investors can pick those which suit their objectives.

There are ‘Asset Allocator FoFs’ that holds investments in other mutual fund schemes that have equity, debt, and gold as their underlying assets. This fund is best suited those looking to get their asset allocation needs addressed using a single fund.

Similarly, he explains the other kinds of Fund of Funds available like International FoFs, Gold FoFs and ETF Fund of Funds available for investors to explore.

He also shared insights on the company’s on-going New Fund Offer – the ICICI Prudential Alpha Low Vol 30 ETF FOF  and said, “The fund is designed to reflect the performance of a portfolio based on the combination of Alpha and Low Volatility. It counters the cyclicality of a single factor strategy. It aims to add stability to growth opportunities
and may exhibit lower performance swings and allows people without a de-mat account to invest in an ETF through lump sum or SIP.”

He added by saying that the fund has been launched keeping in mind that the Nifty Alpha Low Volatility 30 Index has outperformed the broad market indices 8 out of 11 times until 2020.

Watch the accompanying video to listen to the entire conversation…