Mutual funds are rolling out fund of funds (FOF) investing in units of exchange traded fund (ETF). These schemes help investors to overcome a few disadvantages associated with ETF. To transact in units of ETF on stock exchanges, investors have to place orders through stockbrokers. Many of the ETFs are illiquid and investors end up transacting at a price that is perhaps higher than ETF's actual NAV. Investment through FOF helps you invest in units of underlying ETF near the end of the day net asset value—thereby assuring liquidity. It also allows investors to enrol for a systematic investment plan (SIP) which allow automated staggered investments. For this investors have to bear the expenses of FOF.