What is FOF

At present, many VIP services of banks are promoting FOF(FundofFunds in Funds), that is, a fund product invested in various funds, such as China Merchants Fund Bao, Guoxin Gold Classic Portfolio, Huatai Zijin No.2, Everbright Sunshine No.2 and so on. One of the selling points of FOF is worry-free, because frequent switching from one fund to another is something that many people like to do at present, and it is more difficult for individuals to choose the fund with excellent performance in the next stage, so FOF is born after its own liking. Some people call it "the darling of the market".

characteristics of fof

FOF is a kind of collective wealth management product with open-end funds and closed-end funds as the main investment targets, which combines fund product innovation and sales channel innovation. The biggest difference with other funds is that FOF invests in funds and does not directly invest in the stock market.

as a fund, FOF not only has the stable characteristics of general funds, but also has higher expected annualized expected returns compared with bond funds and monetary funds, which can be described as "double insurance" for financial management. FOF with low risk and high expected annualized expected return can help investors buy a "basket fund" at one time, and effectively reduce non-systematic risks through secondary selection. It can be said that it is a financial product with low risk and high expected annualized expected return.

in investment, FOF generally does not invest in all stock funds, but chooses a certain proportion of currency funds or bond funds. in this way, FOF binds multiple funds together, and investing in FOF is equivalent to investing in multiple funds at the same time, but the cost of investing separately is greatly reduced. FOF contains the long-term investment strategy for the fund market, and it is a financial instrument that can be invested for a long time, just like other funds.