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在线翻译:
szdaily -> Business
Multi-strategy FOF lauded
    2017-July-6  08:53    Shenzhen Daily

Liu Minxia

mllmx@msn.com

THE majority of Chinese investors understand investing in capital markets simply as trading stocks, ignoring the fact that the investments come in a variety of forms, including bonds and commodities among others, a latest research report by 21st Century Business Herald and CreditEase found.

To China’s high net worth individuals, fund of funds (FOF), a strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities, will increasingly become a favorable way of investment in capital markets, the report said.

The report, based on research on global capital markets, echoed a trend in China’s fund management industry — both fund houses and wealth management companies are vying to offer FOF products as the country’s FOF market is expected to take off this year.

Forty-two fund management firms, or roughly one-third of China’s total, are applying to issue 73 FOF products, the China Securities Regulatory Commission said Monday. The products, including both multi-strategy and single-strategy funds, are closely watched by the industry as a breakthrough in China’s capital markets.

“FOF is relatively new to Chinese investors,” said Frank Wang, managing director of CreditEase. “FOF, especially multi-strategy FOF, enables an investor to obtain instant diversification in a portfolio of funds, which can accordingly avoid risks and bring stable returns.”

Wang used U.S. economist Harry Markowitz’s portfolio selection model to explain FOF, saying that by analyzing various possible portfolios of the given securities, one can maximize returns and minimize risks by choosing securities that do not move exactly together.

Multi-strategy FOF is also appropriate for investors who do not have the skill or resources to determine which strategies are attractive in the current environment, he said.

Wang, who compared investing in FOF to standing on the shoulders of giants, also urged Chinese investors who used to favor short-term speculations to opt for long-term value investing.

 

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