The first batch of FOF fund is about to start and the trend of diversified assets allocation is deepening
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According to report of Xinhua News Agency, and as of early this month, there were 26 fund companies report 56 FOF products through ordinary procedure, and the first batch of product report would be finished in May.
Since the CSRC issued and implemented the fund of fund (FOF) index formally in last September, as the biggest innovative product of publicly offered funds in this year, the first batch of FOF fund is coming soon.
According to the source, FOF is a kind of fund which is specially invested for other investment funds. As a mode of assets allocation, FOF has come into the sight of investors gradually and enters the golden age of rapid development.
"Don't place all eggs into one basket" is a classic proverb to describe the risk diversification. FOF becomes a powerful tool of risk diversification during configuration of the largest category of assets, and the assets is allocated to different investment categories such as stocks, bonds and commodities in certain proportion to diversify the risk so as to reduce the fluctuation ratio of asset portfolio.
Liu Yiqian, the analyst of Shanghai Securities and Funds Evaluation Research Center expressed that among so many FOF products, the risk-return level has significant difference due to different product orientation and features, so how to evaluate and compare the investment management performance of FOF uniformly becomes a subject of wide public concern. "In the future development of FOF, the relatively stable diversified assets allocation products may have a greater competitive advantage, and the feature products may also have certain space for increasing the earnings on the basis of stable configuration."
Hu Xiaolu, the fund manager to be appointed by Invesco Great Wall FOF Investment Department introduced that according to the development trend of overseas FOF products, by the third quarter of 2016, the global fund assets size was up to $20 trillion, which provides rich soil for the FOF investment. In recent years, the absolute scale of money funds in the global assets size was relatively stable, the proportion of equity fund was reducing, but the proportion of bonds and hedge fund share was increasing.
Differentiation of active management FOF will occur in the future. Hu Xiaolu pointed out that the demand of investors brought out more professional products, but only the distinctive active managers could win out, such as the deepening small-cap stock, technology stocks, health-care stocks and emerging market.
Looking forward to the future development trend of FOF in China, Yang Jianbo, the researcher of Simuwang believed that FOF would grow in a way of institutionalization, professionalization and large scale. "First of all, for the institutionalization, FOF will be a very important financing product in next 10-20 years, especially for the great funds that cannot lose such as the pension fund and annuity, so it is an optimal choice; secondly, for the professionalization, FOF decides the fund target according to experienced researchers, fund managers and investment decision meetings, the investors invest many fund products indirectly through FOF investment and obtain some incomes through assets allocation, so it can reduce the fluctuation; thirdly, for the scale effect, the current publicly offered fund scale in China is up to RMB 8 trillion, and it is expected to reach about RMB 1 trillion in the future.