1. What is a FOF fund?
FoF (Fund in Fund) is a fund that invests in other securities investment funds. FoF 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.
On the one hand, FoF binds multiple funds together, and investing in FoF is equivalent to investing in multiple funds at the same time, but the cost of individual investment is greatly reduced;
On the other hand, unlike pure sales plans such as fund supermarkets and fund bundle sales, FoF completely adopts the legal form of funds and operates according to the operation mode of funds; FoF contains the long-term investment strategy of the fund market. Like other funds, FOF is a financial instrument that can be invested for a long time.
FOF funds generally refer to funds in funds. The biggest difference between the fund in the fund (FOF) and the open-end fund is that the fund in the fund takes the fund as the investment target, while the fund takes stocks, bonds and other securities as the investment target. It screens funds through professional institutions to help investors optimize the investment effect of funds.
Second, what are the advantages of FOF fund?
As a professional institutional investor of investment funds, FOF funds have the following three advantages.
First, high professionalism. FOF funds decide their investment targets through senior researchers and voting meetings, so their decisions are often more professional and scientific, and they also determine the emotional trend of the market. Compared with individual investors, FOF funds dare to open positions at the bottom of the market and throw them at high positions. Take E5 as an example. The Fund was established in June 2004, 20 1 1. It can be seen that the new equation team seized the opportunity of the market low point at the beginning of this bull market, so even after the stock market crash, it can still get the absolute expected annualized expected return of 46. 17%.
The second is to spread risks. By investing in FOF funds and indirectly investing in multiple fund products, investors can effectively avoid the huge risk of putting eggs in one basket. At the same time, professional parent fund teams can also obtain certain expected annualized expected returns through asset allocation. Judging from the characteristics of expected annualized expected returns, the greatest significance of FOF fund is to reduce volatility. Taking the stock market crash as an example, the average withdrawal rate of 87 FOF funds that experienced the stock market crash in mid-June was-10.80%, while that of 3,776 private equity funds was-12.33% and that of 30 19 equity private equity funds was-15.38.
The third is the scale effect. As a channel, FOF fund can invest the funds raised by individual investors as institutional investors, so it can often invest in some private equity funds with high thresholds or scarce places. Take the Star Force FOF Fund of the new equation as an example. Its main bidding targets are star products owned by private equity giants such as Cathay Pacific Future, and the target subscription places are scarce, but investors can indirectly invest by investing in star power FOF.