Funds, also known as funds in funds, are a kind of funds with funds as their investment targets. In the case of investing in the same kind of assets, the risk coefficient of FOF funds is lower than that of similar open-end funds.

the fund takes a basket of funds as the investment object, and the fund company selects the best funds according to strict procedures, so as to achieve better return on investment on the basis of controlling risks. The FOF fund forms a fund portfolio through the fund manager, and you can buy a package of high-quality funds with one click, which is equivalent to a professional helping you choose a good fund and waiting for you to invest.

at the same time, FOF fund greatly reduces the risk of the invested fund by investing in the fund portfolio, and this fund portfolio is selected by professional fund managers, which also reduces the error in the selection of investment varieties to some extent.

investing in various assets and industries through a basket of funds can involve A shares, Hong Kong stocks, bonds, currencies, etc. at the same time, which can basically solve the problem of asset allocation.

FOF funds in the market generally hold 1 to 15 funds. According to statistics, holding 3 funds in a portfolio can achieve the purpose of risk diversification. Therefore, FOF funds generally do not hold more than 3 funds, but hold more than 3 funds. As the number increases, the effect of risk diversification will drop significantly.

FOF funds in the market can be divided into three categories according to fund managers: the first category, fund managers have a stable style, mature investment philosophy, will not chase market hotspots, stick to their own ability circle and have excellent long-term performance. It can be used as a core asset allocation. Secondly, fund managers provide instrumental products, such as theme funds, and when appropriate, they can choose the right fund to suit the market style.

the third category is that fund managers have poor long-term performance, frequent transactions and no clear investment style, which we need to avoid in the investment process.