What is a FOF fund? What are the types and characteristics of FOF funds? People who want to know about this fund come in and have a look. The following small series will tell you how the FOF fund is. The so-called FOF(fundofunds), which originally means "fund in fund", is a special fund product invested in funds, and it is a fund variety that combines fund product innovation and sales channel innovation. With the help of professional investment institutions and scientific fund analysis and evaluation system, we can more effectively find out the superior varieties from various funds with uneven returns, help investors avoid risks and maximize profits.
FoF(FundofFund) is a fund that invests in other securities investment funds. FoF does not directly invest in stocks or bonds, and its 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.
On the one hand, FoF binds multiple funds together, and investing in FoF is equivalent to investing in multiple funds at the same time, but the cost of individual investment is greatly reduced;
On the other hand, unlike pure sales plans such as fund supermarkets and fund bundle sales, FoF completely adopts the legal form of funds and operates according to the operation mode of funds; FoF contains the long-term investment strategy of the fund market. Like other funds, FOF is a financial tool that can be invested for a long time.
The advantages of FoF are: higher income and compensation mechanism.
Characteristics of FOF fund
As a new financial product, FOF is called "fund in fund" and has the following characteristics:
FoF is less risky than other funds. Investment risk is the most concerned issue for every investor. For new citizens, it is difficult and risky for individuals to choose hundreds of different funds in the market. In order to avoid risks, they always want to buy various types of funds.
A senior financial planner said: FoF is actually a fund that helps investors buy a "basket of funds" at one time. Through the second screening of funds by experts, the characteristics of non-systematic risks are effectively reduced. Choosing a single fund is risky and difficult, and FoF greatly reduces the risk of investment funds through portfolio investment.
FoF locks its investors in the ranks of low-risk preferences, which also shows its stability relative to funds. For the second phase of financial product innovation, please be sure to read the important instructions on the last page. The yield of 15FoF is slightly lower than other funds. Although the brokers who launched FoF all claimed that their products were characterized by "low cost and high yield", because FoF could not fully invest in stock funds, it was necessary to allocate certain currency or bond funds, and the yield was definitely not as high as that of stock funds, especially in a bull market. Professionals believe that if you have a professional vision, or have reliable investment experts around you, you should not be too cautious when the market continues to be optimistic. Funds are long-term investment products. Although this year's rate of return can't be compared with last year's, the return probability of investing in equity funds is theoretically higher than that of the relatively conservative FoF. The difference between FoF and other funds in terms of subscription and redemption, the financial planner pointed out that the initial subscription amount of FoF is basically 6,543,800 yuan, while the fund only needs less than 6,543,800 yuan.
In addition to the high threshold of initial subscription amount, FoF has another disadvantage that the opening period is not every day, but according to different brokers, some are open for one week in a quarter, some are open for one day in a week, and other times cannot be bought or sold. Funds are different. Generally speaking, as long as it is not a closed-end new fund, it can be traded every day.
FoF is different from other funds in handling fees. Compared with funds, FoF is different in handling fees, because FoF's investment products are funds, and as long as the funds have handling fees, they cannot be avoided. So the rate just mentioned is actually a second charge based on the fund handling fee. In short, investing in FOF will pay double the cost. Although FoF does not have much advantage compared with funds, it is the first choice for novice investors and investors who have no time to manage their portfolios.
The biggest difference between FoF and open-end fund is that the fund in the fund takes the fund as the investment target, while the fund takes the securities such as stocks and bonds as the investment target. It screens funds through professional institutions to help investors optimize the investment effect of funds.
FOF fund category
According to the international trend, when the number of funds reaches a certain level, there will be funds that screen funds for investors, that is, funds in funds.
Since 1998, the first closed-end fund in the mainland securities market was listed and traded in Kaiyuan, the domestic fund market has made great progress and its varieties are also very rich. As of June 27th, 2005, 65,438+066 securities investment funds have been established in the mainland securities market. They are not only diverse in types, but also different in investment risks, investment targets and investment concepts.
In addition to the diversification of types, the differences in fund investment performance are also very large. After a long-term follow-up analysis of the historical income and development of securities investment funds in the domestic market, the fund evaluation system of China Merchants Securities found that the average difference between the highest and lowest return on investment of closed-end funds reached 36% during the five years from 2000 to 2004. The difference between the annual net growth rate of the closed-end fund with the best net performance and the closed-end fund with the worst net performance is 40% on average, showing a very serious polarization phenomenon. From 2002 to 2004, the gap between the highest net worth of stock-based open-end funds and active investment strategies averaged 25% for three years. This kind of fund market income characteristics of "the income ability of closed-end funds is uneven, and the income differentiation of open-end funds is serious" has been very obvious in the past two years. We expect this phenomenon to exist for a long time with the increase of the number of open-end funds.
In the face of a wide variety of fund markets, it has become a big problem for investors to choose what style of funds and how to choose investment targets in the same style of funds. FoF came into being, which not only relieved the distress of investors in choosing funds, but also created profit opportunities for investors by providing more professional investment management services than ordinary funds.
Due to policy restrictions, pure FOF cannot be issued in China at present.