FOF fund is the fund in the fund. Compared with ordinary fund assets invested in stocks and bonds, FOF fund assets are invested in other funds. In other words, buying a FOF fund is equivalent to buying a basket of funds, and what are the advantages of a FOF fund? You will understand after reading the following contents.

What are the advantages of FOF fund?

Advantages of 1

1, the investment is more professional. FOF fund is a high-quality fund selected by professional institutions through qualitative and quantitative methods for portfolio investment, which is more professional than ordinary investors' own choice of funds for portfolio investment.

2. The risk is relatively low. FOF fund investment funds indirectly hold more stocks with greater dispersion, and the investment risk will be lower than that of ordinary open-end funds.

Two shortcomings

1, low income. Because the investment is more diversified, the risk is lower, but at the same time, the benefits will be reduced.

2. The liquidity is slightly poor. Compared with ordinary funds, the liquidity of FOF funds will be worse. Redemption is not open every day, but it is often open one day a week or one week every quarter.

3. The cost is high. Because FOF funds invest in funds and buy funds, there are related expenses, and FOF funds will be charged for operating as funds, which will involve the problem of double expenses and the investment cost will be higher.

Compared with ordinary funds, FOF funds can spread risks more. For some prudent investors, the risks of other open-end funds may be unbearable, and FOF funds are more suitable for them.