GUANGZHOU (Fund China) - Many investors experiencing the stock market’s ups and downs in the last quarter of 2007 may realized that the fund income gainning by casually selected a fund in the early day has gone.

According to Dragoninfo Financial Information References System’s statistics, suffering the “5·30″ turbulence and several time adjustment after Oct., the first 15 top net value growth funds’average net value growth rate is about 165%, and the last 15 funds’ average net value growth rate is about 85%, among the 148 equity funds( including the closed-end fund). The former is nearly the latter’s double.

The fund investors need to make two choices when facing with the market ups and downs and the fund performance division. First, as far as possible to choose the quality funds and make a long term investment to gain the yield. Second, invest with a fund porfolio so as to evade the risk of a single fund. However, there is an objective reality laying in front of investors, there are more than 300 funds circulating. It is really as difficult as choosing a share when selecting a quality fund. Additionaly, it is also difficult for ordinary investors to know better of the fund investment style, and fund managers’ selecting shares and timing ability. And as more and more new funds issued, the short term operational performance is really hard to reflect the fund managers’real ability. Therefore, the fund election and investment porfolio has become a big big problem for investors.

In order to deal with such a problem, there appeared a new financing variety since the new year. It is FOF(fund of funds) issued by the banks or underwrithers. Such as the the “double selected II” (Phase II) FOF issued by ICBC, this financial variety invests in the open-end fund, the closed-end fund and the shares with a more relax investment restrictions and a more flexible yield than ordinary open-end fund. And this kind of variety’s invsetment proportion is flexible, the proportion of open-end fund(including ETF) can be from 0 to 100% while the proportion of the shares, closed-end funds could be from 0 to 50%, and the new shares’ IPO and the bank deposit from 0 to 100%. Such an fund allocation can gain the yield maximumly in the bullish market while in the bearish market, the FOF can evade the market risk via adjustting the proportaion of funds, shares and cash, or through new shares’ IPO or invsting in bond funds to achieve “Keep Valuation and upward Revalution” of fund asset.

Copyright Fund China 2008.

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