FOF is a fund in a fund, which we simply understand as a fund product invested in a "basket fund". The FOF fund began to enter the public investors' field of vision on 20 17, but the FOF fund is very mature overseas.

Domestically, the earliest insurance funds involved in equity investment were allocated equity assets through operations similar to FOF (buying Public Offering of Fund) before they were directly invested in the grid. Therefore, tracing the history of FOF (or fund portfolio similar to FOF) has developed for a long time at home and abroad, and it was not until the first batch of public offerings of FOF came out in 20 17 that it entered the investment field of ordinary investors.

With the development of the domestic market, FOF funds have reached a considerable scale.

FOF helps to reduce the volatility of portfolio.

The main reason is that FOF has a significant advantage, that is, through professional solutions, investment managers can "choose the best among the best" in the fund, and strive to reduce the volatility of the portfolio without reducing the expected rate of return.

With a complete investment and research system and professional fund research, FOF builds a fund portfolio to smooth short-term fluctuations. Compared with a single fund, the fund portfolio can be decentralized, effectively reducing non-systematic risks and controlling the volatility of portfolio returns.

According to historical data, 20 randomly selected funds are added to form a portfolio, and the volatility is lower than that of a single fund or stock, but the annualized rate of return can still be stable at the upper-middle level.

From this point of view, the risk-return characteristics of FOF products are clear, which is more convenient for investors to choose according to their own risk preferences.

This is also the most attractive place of FOF fund.

I hope the above contents are helpful to you.