The difference between fund class A and fund class C
1, with different operating costs. The fund management fee rate and custody rate of Class A and Class C are 1.50% (year) and 0.25% (year). Class C needs to pay an extra sales service fee than Class A at a rate of 0.70% (per year). Management fee, custody fee and sales service fee are accrued from the fund assets every day. The net value of the fund announced on each trading day has been deducted from the management fee and custody fee, and investors do not need to pay separately in each transaction. Therefore, our investors do not feel much about this part of the cost when they buy at ordinary times.
2. Different subscription fees. Class a is front-end charge, that is, charge at the time of subscription. The subscription fee is 0. 15%. Class c does not have this fee. The subscription fee will be deducted automatically when you purchase the fund, so when you also invest 10000 yuan, the A-class fund will deduct the handling fee of 15 yuan immediately before calculating the share, while the C-class fund will still calculate the share according to 10000 yuan. Many investors will default that C is more cost-effective than Class A and should buy Class C funds. Actually, it is not. Because Class C needs a sales service fee of 0.70% (year) that you can't easily notice.
3. The redemption rate is different. In terms of redemption rate, both Class A and Class C need to be charged. When the redemption is less than 7 days, the rates of both funds are 1.50%. The difference is that Class C funds can be exempted from redemption fees as long as they are held for more than 30 days. And Class A does not charge redemption fee for more than 365 days.
Generally speaking, it is more cost-effective to hold Class C in the short term and Class A in the long term. Because Class C fund shares do not charge subscription and subscription fees, sales service fees are accrued, while Class A fund shares charge subscription, subscription and redemption fees, excluding sales service fees. Class A fund shares and Class C fund shares charge the same custody fees and management fees.
Class A is suitable for long-term investment, while the purchase and redemption cost of Class A funds is high, and short-term investment is not cost-effective. Class C funds are suitable for short-term investment, and there is no need to subscribe for redemption fees, so the handling fee is low and there is no need to consider redemption fees.