——The weapon of asset allocation - FOF
On October 18, 2022, Mr. Su Xin from Minsheng Jiayin Fund Management Co., Ltd. was invited to attend our industry forum and give a lecture on "The Weapon of Asset Allocation - FOF" to the students.
Professor Su Xin is a postdoctoral fellow in management at Shanghai Stock Exchange/Xiamen University, and a PhD in statistics at Shanghai University of Finance and Economics/University of Waterloo. He currently serves as the Director of Asset Allocation Department, Chairman of Investment Advisory Committee, Co Chairman of Investment Decision Committee for Major Asset Lines, and Member of Equity Investment Strategy Committee for Minsheng Jiayin Fund. He also serves as a reviewer for authoritative journals such as "China Management Science" and "Operations Research and Management". He has 1 year of financial education experience, 9 years of securities industry experience, 13 years of fund research experience, and 5 years of FOF investment experience, specializing in major asset allocation, fund research, FOF investment, quantitative investment, financial risk management, and other fields. In this forum, Professor Su Xin systematically introduced the process, models, methods, and FOF investment framework of asset allocation and fund screening for major categories.
Teacher Su Xin first introduced two versions of worry free investment methods - through long-term holding or asset allocation, and then explained the definition and market of FOF. FOF is a fund in a fund that constructs a portfolio by investing in fund products. The advantage of FOF lies in its ability to solve the problems of difficult asset allocation, timing, and fund selection for investors. It introduces FOF as the best financial tool in the era of wealth management substitution and provides an overview of the public FOF market.
In the key section of the forum, Teacher Su introduced that the core of FOF investment lies in the allocation of major asset classes. The key lies in what to allocate, how to allocate, and buying and selling time. It is necessary to clarify the risk return characteristics, correlation, and future return prediction of each asset class, and apply statistical methods. Teacher Jin explained the advantages and difficulties of large-scale asset allocation through the example of a single asset, and introduced the evolution of large-scale asset allocation - from mixed strategy methods to big data and machine learning methods, searching for patterns from massive data. The classification of FOF includes target date type and target risk type, and introduces cycle theory and asset allocation models. Afterwards, based on his own experience and methods in work, Teacher Su introduced a three-tier investment system from top to bottom - the allocation of major assets, the allocation and optimization of segmented assets, and the selection of specific target funds.
During the questioning session, students actively and enthusiastically raised questions about the direction of daily internships, the industry configuration strategy framework of FOF investment, the difference between FOF investment and quantitative investment, and the homogenization of FOF products. Teacher Su Xin patiently answered each question and suggested that students should not rush to enrich their internship experience in different companies. They could also intern in one company for about six months to gain in-depth exposure to important projects, which benefited them greatly. Through this industry forum, students have gained a deeper understanding of FOF investment.
Contributors: Peng Wei, Wang Yi, Yuan Fan
Image provided by: Wang Yi
