FOF is a fund that invests in other investment funds. It indirectly invests in various financial assets by holding other funds, and its essence is diversified asset allocation. The following are the advantages of FOF funds collected by Bian Xiao. Welcome to reading.
Advantages of FOF fund
First, it saves time and effort. Professional investment experts do a good job in allocating funds, so don't worry about not being able to grasp the redemption opportunity.
The second is to choose excellent funds. FOF fund managers dig deep in many dimensions and professionally screen the dominant funds in the whole market.
The third is asset allocation. Track market conditions in real time, optimize portfolio investment, and fully share the advantages of large-scale asset allocation.
The fourth is to spread risks. Ordinary funds themselves invest in stocks, bonds and other assets through portfolios, while FOF re-disperses risks at a higher level by investing in funds with different investment strategies.
The fifth is to lower the threshold. By buying funds from the fund, you can easily own a basket of high-quality funds.
What is an open-end fund?
Open-end fund refers to a fund operation mode in which fund sponsors can sell fund shares or shares to investors at any time according to their needs, and can redeem the fund shares or shares issued at the request of investors when setting up the fund.
What are the risks of open-end funds?
1, liquidity risk. When investors need to sell their fund shares, they may face difficulties in realizing them and being unable to realize them at a suitable price. 2. Unknown purchase and redemption price risk. Investors are usually unpredictable about the change of the net asset value of fund units from the latest trading day to the next trading day, and they can't know what price they will trade at the time of purchase or redemption.
3. Risk of fund investment. Funds with different investment objectives have different investment risks. Income funds have the lowest investment risk, growth funds has the highest investment risk, and balanced funds are in the middle. According to their risk tolerance, investors can choose the types of funds suitable for their financial situation and investment objectives.
4. Institutional operational risks. In addition to systemic risks, open-end funds will also face management risks (for example, the management ability of fund managers determines the income status of funds, and the operation level of registration institutions directly affects the efficiency of fund subscription and redemption, etc.). ) and operational risks.
5. Force majeure risk. Mainly refers to the risks brought to fund investors when force majeure such as war and natural disasters occurs.