FoF is the abbreviation of found of founds, which directly translates to fund of funds.
In FoF, all the money is used to buy the fund . In other funds, funds are used to invest in stocks, bonds or money market instruments.
Christian Democrats hand over money to fund managers to help us choose some good fund products in the market , which is actually equivalent to secondary indirect investment.
The flexibility of FOF is very high. Not only can it buy funds , but it can also use some of the funds to buy stocks, bonds, bank deposits and even new shares or bonds. Therefore, the investment structure of fof is also the most diversified.
According to the different asset types of the main investment, fof can be divided into:
Mixed allocation fof: Equity, Debt and Commodities
Equity fof: choose equity funds to invest in
In addition, there are bond-type fof, currency-type fof, REITs-type fof, etc.
Advantages of fof:
We do not need to understand various fund investment knowledge. We just need to buy a fof fund . Through configuration, the fund manager can make your fund investment obtain a higher investment performance ratio, that is, under the premise of obtaining the same investment income, take a relatively low investment risk.
The fof fund manager will observe various types of funds in the market based on the historical performance of the fund, the shareholding potential, and the operation level of the fund manager, and select a good fund type from a large number of funds, the background of the fund company and other relevant indicators. The fof fund manager is your investment advisor.
Of course, this also has high professional requirements for fund managers, and it is also necessary to choose excellent fund managers to obtain relatively high returns.
Disadvantages of Fof:
Because in the new regulations, Fof does not charge management fees, custody fees and sales fees for investing in its own fund products, that is, it cannot charge double fees for its own funds, and double fees can be charged for buying other people’s funds, but if it is, then Take self-owned funds as the main investment object, and do not exclude excellent funds issued by other fund companies in the market.
However, if you only buy or mainly buy the products of your own fund company, investors will feel that you are helping the outside world, and it is easy to face accusations of moral hazard.
But if you buy in bulk from other fund houses, it will boost the morale of others. In addition, you have to pay handling fees for purchasing products from other fund companies, which is equivalent to increasing investment costs and will harm the interests of investors.
So whether you’re buying your own home or another, it seems like there’s no one inside or out. Therefore, in this contradictory situation, we do not recommend investing in public funds .