Under a portfolio, graded funds decompose the expected return or net assets of the fund to form a fund variety with two-level (or multi-level) risk expected return performance and a certain differentiated fund share. Including parent fund and sub-fund, what is the relationship between parent fund and sub-fund? Let's take a look today.

What are parent funds and sub-funds?

FoFs 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.

Sub-funds are funds that directly invest in stocks or bonds, that is, ordinary fund products.

Sub-fund relationship between parent fund and sub-fund

1. The trading methods of the parent fund and the sub-fund are different. FoFs is not only high in threshold, but also different from sub-funds. Generally speaking, you can trade every day, some for one week in a quarter, and some for one day in a week.

2. The difference between the parent fund and the sub-fund in handling fees is that the investment in fof needs to pay double the fee, while the fund only needs to pay double the fee.

3. Compared with fof, sub-fund has more advantages. On the one hand, the combination of the two can reduce the risk through the parent fund, on the other hand, it can obtain higher expected value-added income through the sub-fund. Protect the rights and interests of investors more effectively.

4. Both the parent fund and the sub-fund exist in the graded fund. Clever use of graded funds can effectively reduce risks and improve expected returns. Funds that cannot be invested by the parent fund shall be invested by the sub-fund.

The above is the relationship between the parent fund and the sub-fund, and I hope it will help everyone. Warm reminder, financial management is risky and investment needs to be cautious.