FOF is a "fund in a fund". Unlike other funds, FOF only invests in funds and does not directly invest in stocks or bonds. Through the second selection of professional institutions, we can help investors choose excellent funds to invest and achieve the goal of optimizing investment results. According to the different investment objects, investment objects and investment strategies, FOF can be divided into many types. What are the advantages and risks of FOF fund?

Advantages of FOF fund

1, diversifying investment risks

It is often said that eggs cannot be put in the same basket, which reminds investors to diversify their investment risks. It is often difficult for a single fund to maintain long-term success. By constructing a multi-strategy fund portfolio, FOF indirectly invests in multiple fund products, thus improving the richness of product strategies and reducing the fluctuation risk of a single strategy.

2. Lower the investment threshold

Investors only need 1 10,000 yuan to buy a basket of private equity funds, realize multi-strategy investment, and have the opportunity to participate in high-quality investment projects with higher thresholds.

Risks of FOF fund

FOF Fund has two managers, and adopts the double charging mechanism, so the rate is relatively high. At present, most FOFs in the market are not in place in terms of asset allocation, and the advantages of portfolio investment cannot be fully exerted. In addition, FOF funds aim to pursue stable expected returns, so in a bull market, the expected returns of FOF funds are usually not as good as those of equity funds.