Recently, public fund FOFs (Fund of Funds), often referred to as "professional fund selectors," have seen a surge in new product launches. On February 11 and February 12 alone, eight public fund management companies issued announcements regarding the effectiveness of fund contracts for a total of nine public FOFs. Extending the timeline to the current year, as of February 12, the number of newly established public FOFs has reached 31, representing a year-on-year increase of 244.44%.
Industry experts suggest that strong demand from investors for stable growth products, combined with ongoing innovation in product offerings, has jointly driven the rapid expansion of the public FOF sector. Concurrently, with the swift development of products such as ETFs (Exchange-Traded Funds), the investment models employed by public FOFs are also evolving.
The primary market for FOFs is highly active. On February 12, two public FOFs, J.P. Morgan Juli Stable 3-Month Holding Mixed (FOF) and SDIC UBS Jufu Stable 3-Month Holding Mixed (FOF), were officially established. On February 11, seven other public FOFs, including Guotai Multi-Asset Stable Navigation 6-Month Holding Mixed (FOF), Fullgoal Hengxin 3-Month Holding Mixed (ETF-FOF), and Yinhua Huayuan Multi-Configuration 6-Month Holding Mixed (FOF), also commenced operations. The institutions launching these products include leading firms like Guotai Fund and Fullgoal Fund, as well as numerous small and medium-sized asset managers.
The vibrancy of the new issuance market for public FOFs is further evidenced by the frequent early closures of fund raising periods. Since the beginning of the year, 13 public FOFs have announced an early end to their fundraising phases.
In the current low-interest-rate environment, the returns from traditional bank time deposits are increasingly failing to meet investors' wealth management needs, leading to a significant rise in demand for stable growth, low-volatility products. Public FOFs, serving as tools for cross-asset and multi-strategy allocation, have become important vehicles for capital migrating from deposits. Furthermore, public fund managers continue to optimize the design of new FOF products, for instance by shortening holding periods to enhance liquidity, which has increased investor acceptance and better aligns with the dual demand for flexibility and certainty.
From the perspective of the multi-asset allocation advantage of public FOFs, particularly within the "fixed-income+" segment, their ability to control drawdowns is notably strong. This has previously contributed to a surge in the scale of new FOF issuances. The public FOF industry has now entered a new phase of development. Against the backdrop of the rapid rise of quantitative markets over the past decade and the recent emergence of ETFs, the investment model for FOFs is undergoing a transformative shift.
In recent years, the asset allocation dimensions of public FOFs have continuously broadened, accompanied by deepening product innovation. For example, the number of ETF-FOFs, which combine the core advantages of both ETFs and FOFs, has been steadily increasing.
The allocation logic for public FOFs has evolved beyond the traditional equity-bond dual structure. It now extends to multi-asset, diversified allocations encompassing A-shares, QDII (Qualified Domestic Institutional Investor) funds, public REITs (Real Estate Investment Trusts), commodity funds, and more, marking a systematic upgrade in product offerings. The focus has shifted from mere return enhancement to systematic asset configuration. Simultaneously, with the leapfrog development of ETFs, the underlying asset tools have matured, rapidly enriching the investable universe for public FOFs and providing a solid foundation for constructing diversified investment portfolios.
Institutionally, public fund managers are comprehensively shifting their FOF product strategies towards cross-market, cross-asset, low-volatility, and high-liquidity configurations, focusing on building capabilities in "multi-asset + quantitative + systematic" frameworks. On the distribution side, bank channels are also actively promoting deeper cooperation in the sales of FOF products.
The iterative upgrading of the public FOF industry imposes new requirements on fund managers. Previously, the FOF investment model followed a classic three-tier division of labor: the FOF manager decided the major asset allocation proportions; the actively managed fund managers selected by the FOF manager handled the allocation within various styles; and those active managers were responsible for generating alpha through stock selection. Today, this traditional three-tier structure is simplifying into two tiers or even becoming more integrated. Utilizing ETF tools, the FOF manager's role is fundamentally transforming from an allocator to a direct participant. FOF managers can now comprehensively主导 investment operations by horizontally and dynamically adjusting underlying asset allocations and vertically seeking alpha across various asset classes.
The ETF market continues to expand in scale, with increasingly refined sub-categories achieving cross-regional, cross-product, and cross-asset coverage. Notably, gold ETFs have seen steady asset growth over the past two years. The development of products like 30-year government bond ETFs and gold ETFs provides crucial support for public FOFs advancing multi-asset allocation strategies. In this context, if FOF managers can accurately grasp major asset class trends and key sector themes, they have the potential to construct high-return portfolios by leveraging ETFs effectively.