First of all, whether it is A, B, C or A and B, the core difference lies in the subscription fee. If it is the three types of funds of the Agricultural Bank of China, Class A generally represents the front-end expenses, Class B represents the back-end expenses, Class C has no subscription fees, and there is no handling fee for the front-end and back-end; Class AB bond funds generally have subscription fees, including front-end and back-end. There is no subscription fee for Class B bonds. That is to say, Class A and Class B funds in the three categories of ABC are equivalent to Class A in AB, which are front-end or back-end subscription funds, while Class C funds in the three categories of ABC are equivalent to Class B funds in AB, and subscription fees are not charged.
If you look at the prospectus carefully, there is an additional item called "sales service fee" among these bond funds that do not charge subscription fees. In the prospectus of Huaxia Bond, it is written as follows: "The A/B fund share of the Fund does not charge the sales service fee, and the annual sales service fee of the C fund share is 0.3%. The fund's sales service fee will be used exclusively for the fund's sales and fund share holders' services, and the fund manager will make a special explanation on this fee in the fund's annual report. "That is to say, although Huaxia Bond Class C does not charge front-end or back-end subscription fees, it charges sales service fees. This sales service fee is similar to the management fee, which is drawn on a daily basis. If we look at the performance of Huaxia A/B and C funds this year, we can find that the return of Huaxia Bond C lags behind A/B by 0.35 percentage points, which is caused by this sales service fee. So are other bond funds. Except for the sales service fee of ICBC Strong Bond Class B, the sales service fee of several other bond funds without subscription fee is 0.3%.
Nothing for nothing. Do not charge a one-time subscription fee, but charge a daily sales service fee. But that doesn't mean there is no difference. Suppose Huaxia bond is ABC III. Because there is no subscription fee, although there is a sales fee for Class C, the sales fee of 0.3% is less than 1% for three years, which is lower than the front-end subscription fee (asset appreciation is not considered for the time being). In this way, it can be said that if you determine that it is a short-term investment, such as 1-2 years or less, then it is not cost-effective to choose C debt for more than 2 years; If it is determined to be more than 3 years, you can choose Class B, because the cost of Huaxia Bond Class B for 2-3 years is only 0.7%, and the longer it is, the less it will be; If there is no judgment on the investment period, you can consider Class A front-end charges. For Huaxia Class A bonds, holding for more than 3 years is superior to Class C bonds, and holding for less than 1 year is superior to Class B bonds.
Another problem that needs to be explained is that although there is no subscription fee for bond funds, like money funds, bond funds still fluctuate. Although their volatility is smaller than that of equity funds, bond funds are likely to lose money without capital preservation. So in essence, it is still very different from the money fund.