FOF is an investment fund. FOF does not directly invest in stocks or bonds, but indirectly holds basic assets such as stocks and bonds through holding funds.

Entrepreneur Li will hold a grand birthday party for his mother recently. He intends to make the banquet into eight cuisines, including Shandong, Sichuan, Guangdong, Jiangsu, Fujian, Zhejiang, Hunan and Huizhou, to satisfy the appetite of all guests (diversifying investment, reducing risks and gaining profits).

Teacher Li doesn't know the cooking and collocation of dishes, nor can he identify the famous chefs of the eight major cuisines (it is difficult for investors to choose a good fund from more than 8,000 funds). He needs to find a master chef who is proficient in eight cuisines to finish this birthday party (FOF fund is chosen, and professional managers are responsible for choosing the fund).

So I invited Master Wang, the executive chef of the state banquet who is proficient in various cuisines (fund manager, good at selecting fund managers). He selected several best apprentices (excellent fund managers in professional fields) from the chefs in charge of each cuisine, and asked them to present their own special dishes for the birthday party.

In this way, Mr. Li held a very grand birthday party for his mother by choosing Master Wang, the best executive chef for the state banquet.