What are the advantages and disadvantages of FOF fund?

After the popularity of funds, there are more and more ways to invest and manage money. However, faced with thousands of funds in the domestic fund market, many investors have no way to start. At this time, a new FOF fund, that is, the fund in the fund, began to appear in front of us.

What is a FOF fund?

FOF is a special fund that invests in other investment funds. FoF does not directly invest in stocks or bonds, and its investment scope is limited to other funds. Indirectly holding securities assets such as stocks and bonds by holding other securities investment funds. It is a new type of fund that combines fund product innovation and sales channel innovation. Simply put, ordinary funds buy a basket of stocks, while FOF funds buy a basket of funds.

Advantages of FOF fund:

1 saves the time and energy of investors who don't know how to choose funds, and is more professional. FOF funds decide the target of the fund through senior researchers and voting meetings, so their decisions are often more professional and scientific, and they also determine the emotional trend of the market.

2Offund, as a channel, can invest the funds raised by individual investors as institutional investors, so it is often possible to invest in some private equity funds with high thresholds or scarce places.

3FOF funds diversify funds into different funds, which is equivalent to adding a layer of diversified investment to the general fund, covering a variety of assets, which can effectively reduce non-systematic risks.

Disadvantages of FOF fund:

1 the initial investment of FOF funds of brokers or fund subsidiaries is relatively high, usually 654.38+10,000 yuan, and the initial investment of FOF funds issued by private equity institutions is usually 1 10,000 yuan.

The liquidity of 2FOF is poor, and the opening period of different FOF funds is different, usually once every six months or once a year.

3FOF investment funds, the fund itself has to charge fees and management fees, which leads to the phenomenon of double charging of fees and management fees.

The market value of 4FOF holding a single fund shall not be higher than 20% of the net asset value of FOF; The single fund held shall not exceed 20% of the net assets of the invested fund. Therefore, the provision of FOF 20% position not only reduces the risk, but also reduces the income during the bull market.

Compared with general funds, there is no advantage in income and flexibility. If you are a newcomer to fund investment and an office worker who has no time to study funds, you may wish to consider FOF investment carefully in the face of a more complicated financial environment in the future.