Front-end/back-end refers to the charging method.

Each company's non-monetary fund type fund has front-end and back-end payment when subscribing and paying subscription fees. Two modes.

Front-end charges refer to the deduction of subscription fees based on the front-end subscription rate and subscription amount when subscribing for a fund, and an additional redemption fee when redeeming.

Back-end charges mean that no subscription fee is charged when subscribing. When redeeming the fund, the subscription fee will be deducted based on the back-end subscription rate and the net value of the fund at the time of subscription and the corresponding shares.

General back-end charges decrease as the holding time increases.

For example, the net value of the fund on the day you subscribe for the fund is 1, the net value of the fund on the day of redemption is 1.2, the front-end subscription fee is 1.5%, the back-end subscription fee is 1.8%, and the redemption fee is 0.5% , subscribe for 10,000 yuan.

1. If the front-end charging method is adopted, fund shares = 10000* (1-1.5%)/1 = 9850 shares, so the funds obtained when redeeming = 1.2*9850* (1-0.5%) = 11760.9 yuan, the income is 1760.9 yuan.

2. If the back-end charging method is used, fund shares = 10000/1 = 10000 shares, and the funds received during redemption = 1.2*10000* (1-0.5%)-1*10000*1.8%= 11,760 yuan, with a profit of 1,760.9 yuan.

3. If you hold it for 1 year, the subscription rate of the back-end charging method will generally be reduced, for example, it may be reduced to 1.5%. If you hold it for 2 years, it may be reduced to 1%. Specifically You can check the fund company regulations.

Take Wells Fargo Tianrui (100023) as an example. Investors can choose to pay subscription fees when subscribing for this fund or redeeming this fund. What investors choose to pay when subscribing is called front-end subscription fee, and what investors choose to pay when redeeming is called back-end subscription fee.

When investors choose to pay front-end subscription fees, a proportional rate will be used based on the subscription amount. If an investor makes multiple subscriptions within a day, the applicable rates will be calculated separately for each individual transaction. The specific rates are as follows:

Subscription amount (including subscription fee) Front-end subscription rate

1.5% for less than 1 million yuan

above 1 million yuan (inclusive) 1.2%

The maximum fee for a single subscription is 50,000 yuan

No subscription fee will be charged for the shares converted by investors who choose automatic reinvestment of dividends.

When investors choose to pay the back-end subscription fee, a proportional rate will be used based on the subscription amount. The back-end subscription fee for a holding period of less than one year is 1.8% of the subscription amount, and the rate will be based on the holding period. Decreasingly, the lowest is zero. The specific rates are as follows:

Holding time rate

Within 1 year (inclusive) 1.8%

1 year to 3 years (inclusive) 1.2% < /p>

3 years to 5 years (inclusive) 0.6%

5 years or more 0

So, in other words, if you choose to buy a fund, If you pay at the back end and hold it for more than 5 years, you can save the subscription fee.