FOF funds have not been in the public eye for a long time. In October 2017, the first batch of FOFs was established. In the past four years, the size and number of fof funds have boomed. However, many investors know very little about fof funds or even know that there are fofs to choose from among fund types . Are fof funds risky? Is it necessary to buy fof funds?
A fof fund is a fund of funds. Unlike other funds that invest in stocks and bonds, fof invests in other funds. In October 2017, the first batch of 6 publicly released fof products were officially released.
In the past 4 years, as of the end of the first quarter of 2021, there were 148 publicly issued fof products in the whole market, with a total scale of 105 billion yuan. Although small in number compared to other types of funds, it is growing very fast. The rapid development of fof funds is inseparable from its own advantages. Many investors who have purchased fof funds have said that they can feel the stable fluctuation characteristics and good holding experience of fof funds. The fof fund chooses broad asset allocation strategies. fof can configure stock funds, bond funds , gold funds, QDII and other funds at the same time. Diversification into various assets can reduce the level of risk without sacrificing expected returns. Fof funds can do this by allocating large classes of assets. Since 2017, fof funds that have been established in the whole market for more than one year have achieved positive returns, with an average return of 15.95%. In the past three years, the average annualized volatility of fof in the whole market was 9.56%.
It is far lower than the average annualized volatility of funds in the whole market of 14.96% during the same period. These characteristics of fof funds make them more resistant to fluctuations when the market falls. In a volatile and falling market, if you are concerned that the risk of stock funds is too high, you can consider deploying some FF funds to balance. This is very rare among new funds issued recently . Many new holding period funds have a holding period of about 6 months or 1 year. Therefore, if you are interested in this new fund, you must make financial arrangements. The setting of the holding period helps fund managers reduce short-term market disruption and focus on the long-term development of the company. For investors, this helps reduce impulse trading. He once said, “Buy index funds and work hard!” 3. Which is better, active or passive? From my personal experience. In a bull market, index funds do outperform more than semi-actively managed funds. However, in the bear market and sideways volatile market, the overall performance of active funds is better.