Research On Product Design And Risk Management Of Domestic Fund Of Funds (FOF)

Based on the background of FOF growing in China,This paper studies the Product Design and Risk Management of Domestic FOF.From the FOF concept,summed up the four modes FOF,namely Internal management + internal configuration,internal management + whole market allocation,external management + internal configuration,external management + whole market allocation of four modes,and the characteristics of the four models were compared.Explained the advantages and disadvantages of FOF from a risk management point of view,the core of FOF is proposed risk management,FOF investment through a number of funds to diversify asset allocation,and through the selection and combination of the underlying funds,and ultimately reduce the risk of the portfolio.Through systematic analysis of the development of Sino-US FOF market and typical products,comparing the features and gaps of these two countrys.Development of American FOF has been more mature,higher market acceptance,The fund size of FOF accounting throughout the fund industry for more than 10%,including mutual fund of funds and fund of hedge funds,overhaul the US pension system is an important factor in promoting the development of the United States FOF.In China,FOF mainly in private nature of the main existence,the main management institutions of FOF are securities companies,trust companies,banks and private equity fund managers,the development of domestic FOF has its own characteristics.Domestic market FOF compared to the US,there are large gaps in expertise,sources of funds,asset allocation and risk management tools.This paper draws on the successful development experience of FOF in the United States and puts forward the two core of FOF management:Product design and risk management,and make specific recommendations of these two aspects.First of all,product design should be based on customer needs,combined with the fund manager's own situation and strategic characteristics,to determine the product form and management model.In the aspect of risk management,five solutions are proposed to solve the liquidity problem of fund management.Attention should be paid to the continuous tracking and evaluation of the underlying funds from three aspects.It is necessary to avoid the selection of funds only based on past performance,while paying attention to the moral hazard of fund selection,developing a portfolio inspection mechanism to detect and eliminate risks in a timely manner.