What is the biggest difference between fof fund and general fund?
Compared with ordinary funds, the biggest difference between fof and ordinary funds lies in the difference in investment targets. General funds mainly invest in securities such as stocks and bonds. Fof funds mainly invest in publicly raised fund products, and the investment ratio is usually above 80%. We can understand fof as a professional "fund buyer" who helps investors buy a "basket" of funds through asset allocation and fund selection.
What are the characteristics of fof fund?
1, secondary risk dispersion
General funds can spread the risk of a single security, while fof's position is mainly a basket of funds, once again spreading the specific risk of a single fund.
For example, some investors may lose a lot because of the collective correction of an industry, but fof's positions are more dispersed than those of a single fund, so this problem is unlikely to occur.
Step 2 save time and worry
There are tens of thousands of funds on the market at present. It takes a lot of time and energy for investors to choose excellent funds. Manager fof can use his own expertise to help investors do this step well. Investors only need to choose the right product from hundreds of FOFs.
Generally speaking, holding fof will be more worry-free and labor-saving, which not only saves the time for investors to choose funds, but also reduces the investment risk of investors. Therefore, fof is more suitable for conservative investors and investors who have no time to manage funds.
3. Double expenses
Because the investment target is a fund, it will generate various expenses such as management fees, and the operation of the fof product itself will also generate expenses, so investors are equivalent to bearing double expenses. Therefore, the cost of investing in fof is slightly higher than that of investing in general funds, which is also a major disadvantage of fof.
The above are some contents of fof fund and general fund, so you can pay attention to them.