Core Viewpoint - In January 2026, FOFs (Fund of Funds) emerged as a significant product in the public offering market, accounting for 20.07% of the total issuance volume, indicating a strong growth trend in this investment vehicle [1][11]. Group 1: FOF Market Performance - As of January 26, 2026, there were 78 newly issued funds with a total issuance of 765.46 billion units, of which 11 were FOFs, totaling 153.62 billion units [1]. - The total issuance of FOFs has exceeded 100 billion units for four consecutive months, reflecting a robust demand in the market [2][11]. - By the end of 2025, the total number of public FOFs reached 545, with a record total scale of 2,440 billion yuan, marking a historical high [3]. Group 2: Factors Driving FOF Growth - The growth of FOFs is attributed to multiple factors, including a low-interest-rate environment leading to a shift in savings, the effectiveness of multi-asset strategies, and strong promotion by distribution channels [2][5]. - Demand for stable investment alternatives has surged due to declining yields on deposits and wealth management products, creating a "deposit migration" trend [5]. - The supply side has seen enhancements through customized FOFs, holding period designs, and multi-asset strategies, improving product competitiveness [5][9]. Group 3: Investment Strategies and Trends - The investment methodology for FOFs has evolved from a focus on selecting individual fund managers to a multi-asset allocation approach, which is now a prevailing trend in the industry [9]. - The diversification of asset allocation has been evident, with significant increases in the proportion of commodity funds and QDII funds in FOF portfolios, aligning with market trends [9]. - FOFs recorded a return of 12.8% in 2025, significantly outperforming the previous year's return of 4.06%, indicating a recovery in performance [9]. Group 4: Future Outlook - FOFs are expected to continue their growth trajectory into 2026, with a potential to absorb a substantial amount of maturing fixed-term deposits estimated at 45 trillion to 50 trillion yuan [11]. - The characteristics of stable FOFs align well with the demand for deposit replacements, and their design can help manage liquidity and stability for banks [11]. - The expansion of ETFs may lead to the emergence of ETF-FOFs as a core innovation direction, while customized FOFs are likely to gain traction to meet diverse investor needs [11].