No matter whether you buy OTC funds or OTC funds, you need to pay a certain handling fee, but compared with OTC funds, OTC funds also have subscription fees, redemption fees and management fees. The letter A or C may be hung behind the same fund, indicating the front-end charging mode and the back-end charging mode respectively. So what does the front-end charge mean? How to calculate the handling fee?

How to calculate the front-end expenses of the fund?

The front-end charge of the fund is to pay the subscription and subscription fees when purchasing the fund, and then calculate the fund share. This also means that the principal of our investment needs to be deducted from the handling fee, and the rest can bring benefits.

For funds subscribed under the front-end charging mode, the handling fee = subscription amount * subscription rate. Investors can apply different front-end charging standards according to their subscription (subscription) amount. Generally, the higher the subscription amount, the lower the handling fee rate.

For investors with short holding period, the front-end fee should be chosen when purchasing funds, because the back-end fee will punish the short-term holding behavior in a certain proportion. Moreover, the longer the back-end charging fund is held, the lower the rate.

In a word, the front-end charge means that the investor settles the subscription fee at one time when purchasing the fund. If the fund is to be redeemed in the future, it is necessary to pay a certain redemption fee according to the regulations. This model is more convenient and free, and the cost is clear at a glance.