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 tool that can be invested for a long time.
The advantages of FoF are: higher income and compensation mechanism.
Characteristics of FoF
As a new financial product, FOF is called "fund in fund" and has the following characteristics:
FoF is less risky than other funds.
Investment risk is the most concerned issue for every investor. For Xin Jimin, faced with hundreds of different funds in the market, it is difficult and risky for individuals to choose, but in order to avoid risks, they always want to buy a little of all types of funds. A senior financial planner said: FoF is actually a fund that helps investors buy a "basket of funds" at one time. Through the second screening of funds by experts, the characteristics of non-systematic risks are effectively reduced.
Choosing a single fund is risky and difficult, and FoF greatly reduces the risk of investment funds through portfolio investment. FoF locks its investors in the ranks of low-risk preferences, which also shows its stability relative to funds.
The yield of FoF is slightly lower than that of other funds.
Although the brokers who launch FoF all claim that their products are characterized by "low cost and high yield", it is impossible for FoF to invest in all stock funds, so it is necessary to allocate certain currency or bond funds, and the yield is definitely not as high as that of stock funds, especially in a bull market. Professionals believe that if you have a professional vision, or have reliable investment experts around you, you should not be too cautious when the market continues to be optimistic. Funds are long-term investment products. Although this year's rate of return can't be compared with last year's, the return probability of investing in equity funds is theoretically higher than that of the relatively conservative FoF.
FoF is different from other funds in the way of subscription and redemption.
As for the difference between FoF and fund, the financial planner pointed out that the initial subscription amount of FoF is basically 65,438+10,000 yuan, while the fund only needs less than 65,438+10,000 yuan. In addition to the high threshold of initial subscription amount, FoF has another disadvantage that the opening period is not every day, but according to different brokers, some are open for one week in a quarter, some are open for one day in a week, and other times cannot be bought or sold. Funds are different. Generally speaking, as long as it is not a closed-end new fund, it can be traded every day.
FoF is different from other funds in handling fees.
Compared with funds, the difference of FoF in handling fees is that as the investment product of FoF is a fund, as long as the fund has handling fees, it cannot be avoided, so the rate just mentioned is actually a second charge based on the fund handling fees. In short, investing in FOF will pay double the cost.
Although FoF does not have much advantage compared with funds, it is the first choice for novice investors and investors who have no time to manage their portfolios. The biggest difference between FoF and open-end fund is that the fund in the fund takes the fund as the investment target, while the fund takes the securities such as stocks and bonds as the investment target. It screens funds through professional institutions to help investors optimize the investment effect of funds.