This year, volatile and divergent market conditions have continued to fuel interest in Fund of Funds (FOFs). According to Huafu Securities statistics, as of the end of the first quarter, the total assets under management for FOFs across the market reached CNY 324.921 billion, representing a quarter-on-quarter increase of 33.31%. Amid this wave of FOF popularity, innovative ETF-FOF products have also entered a period of rapid development. Wind data shows that as of April 30th, six ETF-FOF products have been established this year, with a combined issuance size of CNY 6.793 billion, marking a 53.17% increase compared to the entirety of last year. (Note: Issuance figures are consolidated data across different share classes.)
This type of FOF primarily invests in ETFs, constructing portfolios by holding various types of ETFs to provide investors with products featuring diversified asset allocation capabilities. Recently, Invesco Great Wall's ETF-FOF product, the Invesco Great Wall Yingfeng Diversified Allocation (ETF-FOF) (Codes: Class A 025894; Class C 025895), has been launched. This fund is positioned as an equity-oriented hybrid FOF and is set to be managed by Jiang Hong, a seasoned professional with extensive FOF management experience. It is understood that Jiang Hong's team at Invesco Great Wall FOF has developed an enhanced all-weather allocation strategy, aiming to provide investors with a multi-asset allocation solution designed to navigate market cycles over the medium to long term.
Combining the dual advantages of ETFs and FOFs to create a diversified allocation experience.
As is widely known, ETFs are characterized by high transparency and stable style, effectively reflecting the overall performance of a particular asset class, industry, or style, making them efficient asset allocation tools. ETF-FOFs use ETFs as their primary investment targets. By holding different types of ETFs to build an investment portfolio, they leverage the fund manager's active asset allocation capabilities at the overall portfolio management level. Simultaneously, at the underlying security selection level, they fully utilize the advantages of ETFs, such as high transparency and efficiency. This approach effectively combines the dual benefits of active management and index investing.
Given the current market ecosystem and environment, as instrumental investing and asset allocation concepts gain wider acceptance, ETF-FOFs are poised for greater growth potential. On one hand, index investing has experienced significant growth in recent years. As of April 30th, there were 1,490 ETF products in the market, covering a wide range of categories including broad-based indices, sector/thematic indices, Smart-Beta, QDII, and commodities, providing a rich pool of underlying assets for ETF-FOFs. On the other hand, with increasing geopolitical tensions leading to heightened volatility in global risk assets, coupled with the impact of declining interest rates, relying on a single asset class or style has become increasingly inadequate to cope with market shifts, thereby amplifying investor demand for diversified allocation. (Data source: Wind)
Information indicates that the newly launched Invesco Great Wall Yingfeng Diversified Allocation will invest no less than 80% of its fund assets in ETFs. Positioned as an equity-oriented hybrid FOF, its allocation to equity assets will range between 60% and 95%. The fund can diversify investments across domestic and international stocks, bonds, commodities, and other assets. It aims to actively capture diverse investment opportunities while also managing portfolio volatility more effectively to improve the investment experience for holders.
Seasoned FOF Manager Jiang Hong at the Helm; Her Team Develops Enhanced All-Weather Strategy.
It is reported that the enhanced all-weather strategy model developed by Jiang Hong's team at Invesco Great Wall FOF strives to use scientific discipline to counter market uncertainty, meet diverse investment needs, and create an asset allocation methodology for navigating cycles over the medium to long term. Simply put, the classic all-weather strategy model is an asset allocation strategy designed to "weather bull and bear markets." It primarily achieves this by diversifying investments across assets with different risk attributes, aiming for each asset class to contribute roughly equally to the portfolio's overall risk, thereby adapting to various economic conditions.
Specifically, the classic all-weather strategy primarily constructs four macroeconomic quadrants based on assessments of economic growth and inflation, building asset combinations for each quadrant to ultimately achieve the goal of balanced risk contribution from each quadrant. To better adapt to domestic market conditions and improve allocation efficiency, Invesco Great Wall's enhanced all-weather model incorporates a net expectation gap indicator and introduces macroeconomic indicators such as PMI/PPID, further dividing the macroeconomic state into eight quadrants. Concurrently, through dual validation using historical statistics and win-rate/payoff ratios, it constructs a pool of strong-performing assets for each quadrant. Building on this foundation, the model assigns a risk contribution target for each scenario. Combined with asset volatility, this yields a more objective "risk parity" allocation ratio. This ratio is dynamically adjusted within portfolio management for tactical positioning, while also maintaining overall exposure constraints, enabling more refined management of the investment portfolio.
As a fund manager with long-term experience managing FOFs and investment advisory portfolios, Jiang Hong, the designated manager for the Invesco Great Wall Yingfeng Diversified Allocation, possesses unique advantages in this area. Coming from an insurance asset management background, she brings a diverse investment perspective and is skilled in combining top-down asset allocation with bottom-up fund research for portfolio construction. Her managed equity-oriented FOF, the Invesco Great Wall Zhenpin Three-Month Holding, has recently capitalized on domestic and international technology themes, the recovery in Hong Kong stocks, and rising gold prices over the past year. It has diversified allocations across fixed income, equities, overseas assets, and gold ETFs, achieving a cumulative return of 25.87%, outperforming its benchmark during the same period. (Performance data from Wind; benchmark return was 22.92% for the same period, as of April 30, 2026; allocation data from fund periodic reports, as of March 31, 2026)
Looking ahead, Jiang Hong stated that diverging global macroeconomic conditions provide a foundation for diversified allocation. Regarding equities, she believes growth-oriented styles will perform more prominently in the Chinese market this year, with short-term focus on new energy, technology, domestic demand, and innovative pharmaceuticals. From a medium-term perspective, Hong Kong stocks currently present a favorable allocation opportunity. Over the medium to long term, she holds a positive outlook for the equity market in 2026. Under long-term structural tailwinds, key focus areas include the momentum of recovering corporate earnings, the continued dominance of technology as a market theme, ongoing niche opportunities in resource products and pro-cyclical sectors, with dividend strategies serving as a periodic stabilizer for the portfolio. Regarding bonds, she currently holds a relatively optimistic view. Against a backdrop of accommodative liquidity, the yield curve is expected to see some recovery, with long-term bonds offering relatively good value. Credit bonds may offer limited capital appreciation potential, but carry trade strategies appear more certain. As for commodities, with some marginal easing in geopolitical tensions, commodity prices may partially recover from previously pessimistic expectations, with relative optimism for electrolytic aluminum, rare earths, and gold.
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