Core Viewpoint - The FOF (Fund of Funds) market is experiencing significant growth in both the number of products and total fundraising, with a notable increase in "small blockbuster" FOFs, indicating a trend towards diversified asset allocation and the need for improved cross-market investment capabilities [1][2][6]. Group 1: FOF Market Growth - As of November 12, 2023, a new FOF from the Wanguo Fund raised nearly 1.8 billion yuan, contributing to over 60 FOFs established this year with a total fundraising exceeding 56 billion yuan, significantly higher than the 10.6 billion yuan raised in 2024 [1][2]. - The total scale of FOFs has surpassed 200 billion yuan, with 17 products raising over 1 billion yuan each, highlighting a growing interest in FOFs despite the overall market size being significantly smaller than the underlying funds [1][9]. Group 2: Performance of New FOFs - The newly established Wanguo Zhiyue Stable 90-Day Holding FOF raised 1.793 billion yuan with 5,835 effective subscriptions, while another product, Wanguo Hengyi 3-Month Holding ETF-FOF, raised 414 million yuan [2][5]. - In October alone, several FOFs raised over 2 billion yuan, including Huatai Bairui Yingtai Stable 3-Month Holding FOF, which raised 5.577 billion yuan, indicating a strong demand for these investment vehicles [3][5]. Group 3: Diversification and Asset Allocation - FOFs are increasingly diversifying their underlying assets, now including passive index funds and REITs, with a notable preference for gold and bond ETFs among FOF managers [6][7]. - The top ten most held index funds by FOFs are predominantly bond ETFs, reflecting a strategic shift towards safer asset classes amid market volatility [7][10]. Group 4: Challenges and Opportunities - Despite the growth, over 60% of FOFs have a scale of less than 200 million yuan, indicating a significant disparity in size compared to the underlying public funds, which exceed 30 trillion yuan [9]. - The FOF market faces challenges such as investor perception of complex structures and concerns over double fees, which may hinder further growth [9][10].

Core Insights - The report indicates a clear preference for index funds among public FOFs, particularly in the bond ETF category, with significant increases in holdings and allocations [1][6][8] Group 1: FOF Holdings and Preferences - As of the end of Q3, index bond funds saw a notable increase in FOF holdings, rising from 11.14% at the end of Q2 to 14.94%, with a total holding size of 15.672 billion [1][6] - FOFs favored gold ETFs and bond ETFs over stock ETFs, with the top ten heavily weighted index funds being bond ETFs [1][7] - A total of 98 FOFs held the Huaan Gold ETF, with a holding of 208 million shares valued at 1.735 billion, reflecting an increase of over 7 million shares from the previous quarter [2][3] Group 2: Specific ETF Holdings - The second to fourth most held ETFs by FOFs include Hai Fu Tong Zhong Zheng Short Bond ETF, Peng Yang Zhong Dai 30-Year Treasury ETF, and Hua Xia Hang Seng Technology ETF, with 67, 54, and 39 FOFs holding them respectively [3][4] - The Hai Fu Tong Zhong Zheng Short Bond ETF saw a significant increase in holdings, with one FOF increasing its position by 8.8541 million shares [3][4] Group 3: Overall Market Trends - By the end of Q3, the total market size of FOFs reached 187.246 billion, marking a quarter-on-quarter increase of 19.69% [8] - The overall size of index funds reached 7.75 trillion, with an increase of over 1 trillion from the previous quarter, indicating a strong growth trend in the ETF market [9] - The total size of ETFs in the market reached 5.77 trillion, with 2.04 trillion being new growth this year, particularly in bond ETFs which approached 700 billion, with over 500 billion being new growth [9]

Core Viewpoint - The report highlights a significant shift in the investment preferences of public fund of funds (FOF), with a clear inclination towards index funds, particularly bond ETFs, as evidenced by their increased allocation in the third quarter of 2023 [1][6]. Group 1: FOF Investment Trends - In the third quarter, the allocation to index bond funds by FOFs increased from 11.14% at the end of the second quarter to 14.94%, with a total holding size of 15.672 billion yuan, ranking second among all fund types [2][9]. - The most favored index funds by FOFs are not stock ETFs but rather gold ETFs and bond ETFs, with the top ten heavily weighted index funds all being bond ETFs [2][8]. Group 2: Specific Fund Holdings - A total of 98 FOFs held the Huaan Gold ETF, with a holding of 208 million shares valued at 1.735 billion yuan, reflecting an increase of over 7 million shares compared to the previous quarter [3][4]. - The second to fourth most held ETFs by FOFs include the Hai Fu Tong Zhong Zheng Short Bond ETF, Peng Yang Zhong Dai 30-Year Treasury ETF, and Hua Xia Hang Seng Technology ETF, with respective FOF holdings of 67, 54, and 39 [4][5]. Group 3: Overall FOF and ETF Growth - As of the end of the third quarter, the total market size of FOFs reached 187.246 billion yuan, an increase of 30.802 billion yuan, representing a quarter-on-quarter growth of 19.69% [9]. - The total size of index funds reached 7.75 trillion yuan, up from 6.51 trillion yuan at the end of the second quarter, with ETFs alone accounting for 5.77 trillion yuan, including 2.04 trillion yuan in new growth this year [10].

Core Viewpoint - The trend of index-based allocation in public FOFs (Fund of Funds) is becoming increasingly prominent, with a significant preference for ETFs (Exchange-Traded Funds) over actively managed funds [1][4][7]. Group 1: FOF Holdings and Trends - As of October 25, 2023, many FOFs have shifted their top holdings to ETFs, with 9 out of 10 top funds in some cases being ETFs, indicating a clear trend towards index-based investment strategies [1][3]. - The report highlights that 90.73% of public FOFs are expected to allocate to ETFs by the end of 2024, with approximately 9.2% of FOF holdings being ETFs by mid-2025 [4][6]. - Notably, among the 37 FOFs that disclosed their third-quarter reports, 11 had ETFs as their largest holding, with 5 of these ETFs having a holding value exceeding 10% of the fund's net asset value [4]. Group 2: Product Innovation and Demand - In response to strong demand, new products such as multi-asset allocation FOFs and ETF-FOFs are being introduced, reflecting the evolving landscape of fund offerings [2][5]. - The emergence of multi-asset FOFs, which allow for a mix of active and passive investments, is evident, with recent launches indicating a growing trend towards diversified investment strategies [5][6]. - The ETF-FOF products are designed to allocate over 80% of their non-cash assets to ETFs, showcasing a significant shift towards passive investment strategies [5][6]. Group 3: Managerial Challenges and Opportunities - The proliferation of index funds presents both opportunities and challenges for fund managers, as they must enhance their asset allocation capabilities to navigate a more complex investment landscape [7][8]. - Fund managers are increasingly focusing on diverse asset classes, including equities, fixed income, commodities, and overseas investments, to create optimal portfolios that outperform traditional strategies [7]. - However, challenges such as market volatility and liquidity issues in certain ETFs may complicate asset rotation strategies, necessitating innovative approaches to maintain competitive advantages [8].

Group 1 - The core viewpoint of the news is that the market has seen the emergence of the first 200 billion yuan level Sci-Tech Bond ETF, with the total scale of bond ETFs exceeding 5300 billion yuan [1][3] - As of August 13, the total scale of 10 Sci-Tech Bond ETFs has reached 1156.91 billion yuan, with 8 of them entering the "billion club" [1][3] - The first batch of 10 Sci-Tech Bond ETFs was launched on July 10, with an initial fundraising scale of nearly 290 billion yuan, significantly boosting the overall market scale of bond ETFs [1][3] Group 2 - The average daily turnover rate of the 10 Sci-Tech Bond ETFs exceeds 55%, with an average daily trading volume of over 56 billion yuan, indicating high liquidity and active trading [2] - The design of the Sci-Tech Bond ETFs includes a T+0 trading mechanism and a physical redemption model, enhancing trading flexibility [2] - The rapid development of Sci-Tech Bond ETFs reflects strong market demand for bond tools and showcases the refined operational capabilities of public funds in index investment [2] Group 3 - The total scale of the bond ETF market has increased significantly, reaching 5363.42 billion yuan as of August 13, up over 208% from the beginning of the year [3] - There are currently 24 bond ETFs with a scale exceeding 100 billion yuan, with various types including short-term financing, convertible bonds, and municipal bonds [3] - Major bond ETFs such as Hai Fu Tong's short-term financing ETF and Bosera's convertible bond ETF have also reached significant scales, contributing to the overall growth of the market [3] Group 4 - The rise of passive bond investment is attributed to several factors, including the continuous decline in interest rates, making it difficult for active bond investments to achieve excess returns [4] - Passive products like bond ETFs are favored for their high transparency, low fees, and T+0 trading mechanisms, attracting numerous investors [5] - Regulatory support for the bond ETF market has created a favorable environment for development, including policies to promote interconnectivity between markets and expedite ETF approval processes [5]