According to the "Guidelines for the Operation of Public Offering Securities Investment Funds No.2-Guidelines for Funds in Funds", investment precautions:
1. More than 80% of the fund assets in the Fund are invested in other publicly issued fund shares, and the fund manager will disclose the net value of the fund shares in the Fund in time to show notarization; The funds in the Fund will set up special chapters in the regular reports and prospectus to disclose the relevant information of the funds held and reveal the relevant risks.
2. The market value of a single fund held by FOF shall not exceed 20% of the net asset value of FOF, and the single fund held by all funds managed by the same manager shall not exceed 20% of the net asset value of the invested fund. This "double 20%" red line is a new investment compared with the previous "double 10%" red line. This setting shows that the scale of FOF will continue to expand in the future, paving the way.
Three. When fund managers use FOF assets to invest in financial instruments such as stocks and bonds, the investment varieties and proportions need to conform to the investment objectives and investment strategies of the funds in the fund. Compared with the exposure draft and the official draft, the provisions on FOF investing in financial instruments such as stocks and bonds have been added. In terms of liquidity risk management, FOF can invest in closed-end operating funds, fixed-term open-end funds and other funds with limited circulation, but the investment ratio should be set reasonably and a special risk management system should be formulated.
As soon as the fund's fund guidelines were released, many publicly offered FOF products also joined:
1, Huaxia Fund has set up an inter-departmental asset allocation team, and the relevant teams have made sufficient professional research reserves for FOF Fund, and have accumulated rich resources in strategic and tactical asset allocation, asset allocation model and fund optimization, and prepared many products.
2. Tian Hong Fund has prepared several sets of FOF strategies in the form of "internal excavation", which is in the final stage of actual measurement and selection.
3. Guangfa Fund has issued several FOF special products, and is actively preparing for FOF Public Offering of Fund.
4. Penghua Fund began to publicly sell FOF products several years ago, and with the help of foreign shareholders' resources, it conducted a deeper understanding and research on overseas FOF markets and products, and explored the possible product direction of domestic FOF.
FoF 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.
The prospect of public offering FOF is very promising, which will not only affect the company's product management scale, but also promote the characteristic development path of fund companies and product public offering in the FOF era. However, the development of FOF public offering faces two major challenges:
First of all, the situation of domestic basic market and the structure of investors are very different from those of mature markets. The public offering FOF in the United States has solved the needs of low pension rate and scattered asset allocation of institutional customers, which is not exactly the same in China;
Second, the core competence industries such as asset allocation ability and fund selection ability required by FOF public offering are relatively scarce, and there are not many fund companies in the industry that really have FOF investment ability.
Fees and performance commissions of funds in funds
Similar to funds, FOF products need to pay certain participation fees, withdrawal fees, management fees and custody fees. Management fee, custody fee and sales service fee are accrued daily and deducted from the net value. In addition, investors also need to pay participation fees and exit fees. Some wealth management products do not charge participation fees, and the withdrawal fee is generally inversely proportional to the holding time. The shorter the holding time, the higher the withdrawal fee.
Unlike funds, most FOF products also have performance commission clauses. When the investment performance exceeds a certain standard, the brokerage firm will extract part of the expected annualized expected income as a reward. The proportion of performance commission directly affects the expected annualized expected return that investors get.