When buying an open-end fund, the basic people generally need to pay a certain subscription fee, and there are two ways to collect this fee: front-end fee and back-end fee. Front-end charge means that investors pay the subscription fee when they buy funds, while back-end charge means that investors do not pay the subscription fee when they buy funds, and then pay them when they sell them.
For example, if you invest 1 0,000 yuan to buy a fund with a net value of 1 yuan, the front-end fee is 1%. If the front-end fee is used, only 9900 fund shares will be obtained, because there is still 1 000 yuan (10,000×1%= 65438+). If the back-end fee is adopted, 10000 fund shares will be obtained. When you redeem the fund, the amount you redeem multiplied by the back-end rate is your back-end subscription fee.
Generally speaking, the front-end subscription rate will decrease with the increase of subscription amount, and you can also enjoy the front-end subscription rate discount through online direct sales of fund companies. At the same time, in order to encourage investors to hold funds for a long time, the rate of back-end fees will generally decrease with the growth of funds held. Some funds even stipulate that if investors can hold the fund for a certain period of time before selling it, the back-end fees can be completely exempted.