1. Investing in a Fund of funds for generating a monthly retirement income is convenient as the investor doesn't incur any tax on switching and rebalancing, which is done at the fund level, unlike in a traditional equity mutual fund.
2. However, its redeemed amount doesn't get same tax benefits as an equity fund, even if it is purely equity-based, as it is treated as a non-equity fund.
3. Further, you are totally dependent on the parent fund to choose the right combination of schemes for you, which may not necessarily suit your own risk profile.
2. However, its redeemed amount doesn't get same tax benefits as an equity fund, even if it is purely equity-based, as it is treated as a non-equity fund.
3. Further, you are totally dependent on the parent fund to choose the right combination of schemes for you, which may not necessarily suit your own risk profile.