Parent-child fund refers to the investment mechanism with both common stock and preferred stock in the capital market. Specifically, it is composed of a series of interdependent funds, that is, the parent fund and several sub-funds, which support and coordinate each other in terms of funds and income. Compared with ordinary funds, parent-child funds can not only diversify investment in the stock market, but also reduce risks and improve returns by optimizing asset allocation.

Compared with ordinary funds, parent-child funds have better risk control ability and higher rate of return, which is mainly due to the cross-market and cross-industry nature of their investment. In addition, the parent-child fund adopts active allocation and dynamic adjustment to respond to changes in market trends in a timely manner, which has higher flexibility and adaptability. For ordinary investors, parent-child funds have low investment threshold and stable and transparent income, which is an important way to allocate investment assets.

Although the parent fund has many advantages, it is also accompanied by a series of challenges and risks. Parent-child funds require higher accuracy of asset portfolio and need a lot of personnel and technical support. At the same time, there may be some management problems, such as irregular disclosure and asymmetric information. In addition, the parent-child fund also faces risks such as uncertain market environment and policy changes. Only by rationally analyzing risks and benefits and making wise choices in wise asset allocation can we get better returns.