FOF(Fund of Funds), originally meaning "fund in fund", is a kind of fund that invests in other securities investment funds. Do not directly invest in stocks or bonds, and the investment scope is limited to other funds. Indirectly holding securities assets such as stocks and bonds by holding other securities investment funds. It is a new type of fund that combines fund product innovation and sales channel innovation.

It can more effectively find out the superior varieties from various funds with uneven returns, and help investors avoid risks and obtain benefits to the maximum extent.

Advantages of FOF:

1. Lower the purchase threshold.

Due to the problem of funds, it is difficult for investors to buy all the favorite funds in the market. Buying FOF funds is equivalent to buying multiple funds, which reduces the purchase cost.

spread risk

FOF funds are screened by fund managers in the market, and they can buy more than one fund, which disperses the investment risk compared with the situation that investors only buy one or two funds.

More professional

Choose a FOF fund created by a professional investment institution. Under normal circumstances, a conscientious fund manager can use the data of professional institutions to be richer, more professional and more objective in product analysis.

? Disadvantages of FOF:

1. Double charging problem

Choose FOF, on the one hand, you have to pay the fee to FOF manager; On the other hand, FOF products mean the fees paid to portfolio holding funds during operation. Therefore, in general, the total cost of FOF funds will be higher than that of ordinary funds.

2. Large FOF may indirectly harm the interests of fund holders.

For example, when a large-scale FOF fund invests in a smaller fund product, the entry and exit of the FOF fund will have an impact on the net value and income of the invested fund, thus damaging the interests of the basic fund holders.