"Sold Out in One Day"! FOF funds are trending

What are the driving factors behind the growth of AI · FOF funds?

Since the beginning of this year, the public fund market has seen an unexpected “main character”—FOF funds, which have long been on the fringe, are now making frequent appearances with “one-day sell-outs” and “early fundraising.” Currently, the latest size of FOF funds has exceeded 300 billion yuan.

By 2026, the growth momentum of FOFs continues. Data shows that as of March 19, the net asset value of FOFs reached 308.965 billion yuan, an increase of 64.777 billion yuan from the end of 2025.

The issuance side more directly reflects market enthusiasm. Data indicates that this year, 44 new FOFs have been established with an issuance scale of about 65.125 billion yuan; in the first quarter of last year, only 16 were established with an issuance scale of 14.147 billion yuan.

Dongwu Securities Chief Economist Lu Zhe: Since the beginning of this year, FOFs have significantly increased their presence in the issuance market. Some major fund companies are focusing on this area, expanding the market through multi-strategy FOFs, pension FOFs, and other products.

Industry insiders say that relying on buying a single fund to make money is increasingly unable to meet the needs of stable wealth management. Against this backdrop, FOFs that use professional institutions to create multi-fund portfolios are gradually gaining investor attention. By investing in multiple funds, FOFs achieve diversification across asset classes and investment strategies, which to some extent reduces the impact of volatility in individual assets on overall returns.

CICC Chief Domestic Strategy Analyst Li Qiuxuo: As the public fund market continues to expand, diversified investment tools such as commodities, overseas assets, and REITs are becoming more abundant. Currently, most FOF products on the market are based on bonds, with appropriate allocations to equity funds, balancing returns and risks by controlling equity positions.

From the sales channel perspective, banks play an important role in FOF issuance. The proportion of new FOF products sold through banking channels continues to rise. Major banks are also accelerating their layout, launching exclusive FOF plans, shifting from single-product distribution to systematic and brand-oriented operations.

Ping An Securities Asset Management Division Portfolio Investment Head Li Zhaoming: In recent years, bank wealth management funds have gradually flowed into the public fund market. FOF products, with features like risk diversification and flexible allocation, perfectly meet the needs of bank clients for stable investments.

News link: What is an FOF?

What exactly is the highly discussed FOF fund?

FOF stands for Fund of Funds, which is a fund that invests in other securities investment funds. By holding multiple different types of funds, it provides investors with a one-stop asset allocation and risk diversification investment approach.

In simple terms, an FOF is like a “fund portfolio” managed by professional institutions, helping investors select quality products from a large number of funds and build an investment portfolio through professional asset allocation, aiming to provide a more stable investment experience.

Investing in multiple funds through an FOF allows for secondary risk diversification compared to holding only one fund or a single type of fund, often summarized as “don’t put all your eggs in one basket.”

However, it should be clear that diversification can reduce portfolio volatility but cannot eliminate investment risk. FOFs still carry the possibility of net value fluctuations and principal losses. As financial markets continue to develop, the types of underlying funds that FOFs can invest in are becoming increasingly diverse. With features like asset allocation and risk diversification, FOFs are gradually becoming an important tool in many investors’ asset allocation strategies.