NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Scheme Related Information
Which statement about a Fund of Funds (FoF) scheme is correct?
A Fund of Funds scheme invests mainly in units of other mutual fund schemes rather than directly in securities. This gives investors diversified exposure through underlying funds, and an AMC may offer it alongside its other schemes.
- AIt invests mainly in units of other mutual fund schemesCorrect
- BIt invests directly in listed equity shares only
- CIt invests only in government securities
- DIt cannot be offered by an AMC that has other schemes
Explanation
A Fund of Funds scheme invests primarily in units of other mutual fund schemes, which can be of the same fund house or of others. It does not buy equity or bonds directly as its main strategy, and AMCs can launch it alongside other schemes.
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