Recently, the layout of FOF (Fund of Funds) products by public funds has accelerated significantly. Since July alone, nearly 30 new FOF products have been launched or established, including many pension FOF products.
Industry insiders pointed out that under the background of the continuous promotion and implementation of the personal pension policy, pension FOF will usher in new development opportunities, and it is expected to drive the development of the entire FOF market, thereby better serving the needs of residents' wealth management.
"Funds of Funds" Market Picks Up
The so-called FOF fund is a fund that invests exclusively in other securities investment funds.
If the fund is a basket of stocks, then the FOF fund is a basket of funds.
Through the screening of funds by professional investors, the effect of fund investment will be further optimized.
Generally speaking, the investment scope of the fund is all-encompassing, including almost the vast majority of investable assets: stocks, various indices, bonds, currencies, gold and other commodities.
FOF products, which can be directly invested in various funds, are investment tools that facilitate the allocation of various types of assets and save allocation costs.
Moreover, FOF can achieve full coverage of the fund market, select the best among the best, and can also invest in on-market funds to seize the opportunity of discount arbitrage on and off the market.
In recent years, the overall scale of my country's public offering FOF market has shown a steady growth trend.
Wind data shows that as of August 2, there were 322 FOF funds in the whole market, with a total size of 226.217 billion yuan, an increase of 3.976 billion yuan from the beginning of the year.
At the same time, affected by the recent market correction, the performance income of FOF products also began to stabilize and rebound.
In the past 3 months, while the overall positive income was achieved, a total of 50 products had a total return of over 10%.
Compared with other product types, FOF products have the characteristics of low volatility and low downside risk.
Pengyang Fund said that the advantage of FOF products lies in flexible and dynamic asset allocation.
Especially when the stock market fluctuates or performs poorly, the advantages of FOF products in asset allocation are more prominent.
Taking 2021 as an example, 94% of FOF products in the entire market have achieved positive returns, while only 68% of active equity funds have achieved positive returns.
In the first half of 2022, most equity funds experienced a relatively large drawdown, and some funds even set a record of the largest drawdown in history, while the FOF fund has a relatively small drawdown under the same circumstances, which better protects investors. holding experience.
It is worth noting that since June and July, both the number of FOF products issued and the issuance share have increased significantly compared with the previous months.
In this regard, Tang Zhengdong, director of the multi-asset strategy department of Pengyang Fund, believes that, first of all, after the equity market experienced the "deep V" market in the first half of the year, investors' risk appetite has decreased compared with before, reflecting that investors are more mature and more mature. reason.
Since FOF funds have the characteristics of natural secondary risk diversification and low drawdown, when deploying FOF funds at this time, compared with other types of public funds, it has a better risk-return ratio advantage and can attract more market funds. .
"Secondly, after the equity market has rebounded sharply since late April, the unilateral upward pattern may change, and investors need to pay attention to more factors. First, the overseas macro environment has not completely turned to be risk-friendly, and second, except for some extreme In a popular track with high prosperity and strong fundamentals, other sectors have uncertainty during the semi-annual report results release window. Therefore, before the policy is further increased or the fundamentals improve beyond expectations, the market is likely to enter a volatile trend. In this way Against the background of the IPO, FOF funds are a better platform for issuance and fundraising, whether in terms of market adaptability or the timing of opening a position." Tang Zhengdong said.
In addition, many industry insiders pointed out that the accelerated layout of FOF products is inseparable from the rapid development of pension FOF products.
Under the guidance and promotion of policies, major fund companies have taken the initiative to deploy pension FOF in advance, so as to prepare for the future state-guided personal pension investment in pension FOF products.
Elderly care products continue to expand
In April this year, the General Office of the State Council issued the "Opinions on Promoting the Development of Personal Pensions", marking the official introduction of the personal pension system and the beginning of a new era of "personal pensions".
In June, the important supporting system for personal pensions, "Interim Provisions on the Management of Personal Pension Investment in Public Offering Securities Investment Funds (Draft for Comment)" was released, proposing that personal pensions should be invested in public funds, which are planned to be preferentially included in pension target funds, and will be further expanded in the future. In terms of product range, the development of FOF funds may usher in a "highlight moment".
Since the first batch of pension target funds were approved for issuance in August 2018, with the increase in pension investment demand and the continuous introduction of related systems, the number of pension FOF products has ushered in continuous expansion.
According to data provided by Pengyang Fund, as of the end of June this year, there have been 195 pension FOF products in the whole market, with a total scale of 105.7 billion yuan.
As an important supplement to the third pillar of pensions, public pension products currently focus on pension-targeted FOF products.
Among them, the target-date pension FOF allocates major types of assets according to the decline curve, and takes the investor's retirement date as the target, and allocates major types of assets according to the decline curve. As the target date approaches, the fund's asset allocation plan changes accordingly.
Another product, the target risk pension FOF product, sets the risk level of fixed products, and sets the benchmark allocation ratio of equity assets and non-equity assets according to specific risk preferences.
It is worth mentioning that the "Interim Provisions on the Management of Private Pension Investment Public Offering Securities Investment Fund Business (Draft for Comment)" clearly states that in the trial phase of the personal pension system, it is planned to be included in the last four quarters with a scale of no less than 5,000. 10,000 yuan pension target fund.
According to relevant calculations, as of the end of the first half of the year, the list of eligible pension target funds has approached 100.
China Asset Management stated that the company has accumulated 21 years of experience in pension investment management. It has not only established an institutional framework suitable for pension management, equipped with senior investment managers, but also learned from international advanced asset allocation concepts and accumulated rich experience in FOF management. It has built a theoretical system of asset management and an all-round asset allocation system of experts, built a complete product line, and paid more attention to continuous investor education and companionship.
At the same time, with the gradual implementation of the personal pension policy, China Asset Management will give full play to its professional advantages and work hard on pension products and services.
As one of the earliest fund management companies in the industry to participate in personal pension business, Yinhua Fund established the FOF Investment Management Department in 2016, which is mainly engaged in the investment and research of pension target funds for personal pension business. system, built the transaction and valuation system required to complete the FOF, established and improved the FOF
relevant risk management systems.
The company has established an independent FOF investment decision-making committee, which is responsible for the investment decision-making management of FOF products.
In addition, Yinhua has also established an investment advisory team, taking personal pension investment as an important investment advisory scenario, and has launched a variety of investment advisory products and services on major online platforms.
Promote a win-win situation
The performance of FOF products has always been the focus of investors' attention. With the completion of the disclosure of the second quarterly report of public funds, the overall situation of the public FOF market has also surfaced.
Against the backdrop of the volatile A-share market in the second quarter, public FOF funds have increased their equity positions as a whole.
According to Wind statistics, in the second quarter, the market value of stock and hybrid funds in FOF heavy-holding funds increased by 27 billion yuan, accounting for 97.6% of the increase in the market value of FOF heavy-holding funds.
The market value of stock-type and hybrid funds with heavy holdings increased by 1.77% to 75.9% compared with the first quarter.
The market value of money market and alternative investment funds with heavy positions fell by 100 million yuan and 800 million yuan respectively.
In addition, as a professional investor, the FOF fund's holding trend also has certain reference significance for ordinary investors.
In the second quarter, funds in the heavy-holding materials and industrial industries were favored by FOF, and five funds in the heavy-holding materials and industrial industries, including E Fund Supply Reform, entered the top ten in the heavy-holding overweight list.
Regarding the investment opportunities of FOF funds in the second half of the year, Tang Zhengdong believes that from the perspective of striving to pursue absolute returns, FOF funds with low drawdown and excellent long-term return risk indicators are more prudent and stable investment choices.
For most investors with medium or low risk appetite, avoiding market risk at this stage is more important than obtaining higher excess returns.
Industry insiders generally believe that with the familiarity and recognition of FOF funds by individual investors, FOF will see positive changes in investment strategy diversification, product type diversification, and management methods in the future, and the overall market size is expected to further increase.
"The development of FOF helps fund investors to establish a pattern of adaptation, professionalism and win-win." Wu Han, manager of Dacheng Fenghua's stable holding of FOF in June, said that the development of FOF will further help establish the principle of investor suitability , that is, investors should choose appropriate products according to their own risk tolerance.
At the same time, through professional asset allocation and fund selection strategies, FOF managers help fund investors to diversify risks through asset allocation, smooth the fluctuations in the net value of products, and strive to build a fund portfolio with the best risk-return ratio.
In general, the development of FOF is conducive to the formation of a win-win situation for individual investors, FOF managers and industry development.
Individual investors can use the professional, scientific asset allocation and fund selection capabilities of FOF management to obtain better risk-return returns; FOF managers can use the ability of excellent fund managers in the vigorous development of the fund industry to achieve "standing on the giant's side." The goal of serving investors on the shoulders; the fund industry can make the development of the fund industry more orderly, diversified and sustainable through the professional investment of FOF managers.
"When individual investors choose FOF, they must first understand their risk appetite, and choose appropriate FOF products according to their risk appetite. For example, investors with low risk tolerance are advised to choose stable FOF; secondly, although asset allocation can be To a certain extent, it helps us smooth the fluctuation of the net value of the product, but the short-term performance of FOF products is inevitably affected by various market risk factors and fluctuates, especially for FOF products with a high proportion of risk assets such as equity assets, investors can be patient. Hold it for a while." Wu Han suggested.
Ma Chunyang