Why choose FOF for project investment?
Compared with well-known stock funds or hybrid funds, FOF has many advantages:
Diversification of risks: FOF products are selected, and the asset allocation of stock funds is created by technical professionals according to quantitative analysis and judgment, which makes the performance of the selected funds more guaranteed. Compared with the single stock fund invested by the project, the risk diversification ability is better.
Lower project investment threshold: Due to the limited project investment threshold of some commodities, ordinary investors usually cannot invest in multiple different asset management products, but FOF can lower the investment threshold of diversified projects for ordinary investors, enabling them to invest in multiple stock funds at lower cost, greatly increasing the types of investment funds and enriching the types of project investment for ordinary investors.
Obtaining excess returns according to financial planning: FOF can allocate assets more technically and professionally, and if it can allocate stock funds with the same design style in the appropriate sales market, it is expected to obtain higher excess returns;
In China, the stock funds that have been sold with the overall goal of aged care services have all adopted the Public Offering of Fund FOF method. For example, the stock funds with the overall target time series of E Fund Huicheng aged care services will gradually reduce the allocation ratio of equity assets as the overall target time approaches, which can well match the characteristics that investors' risk tolerance will gradually decrease with age. In foreign countries, FOF is also the main way to invest in old-age services. As we all know, service-oriented pension funds often choose the FOF method to make long-term stable profits, which is more optimistic about the inherent risk diversification characteristics of FOF.