Except for the money fund, the transactions of other funds basically require handling fees. However, different types of funds may lead to different rates and fees. The following are the common risks in the fund trading market collected by Bian Xiao. Let's have a look!
Common risks in fund trading market
Market risk: the net value of the fund will change with the fluctuation of the market, and there is market risk. The uncertainty and volatility of the market may lead to the decline of the net value of the fund, thus reducing the asset value of investors.
Fund risk: Different types of funds have different risk characteristics. For example, stock funds may be greatly affected by stock market risks, and bond funds may face interest rate risks and credit risks. Investors need to fully understand the risk characteristics of funds and choose suitable funds within the risk tolerance range.
Liquidity risk: fund shares are usually traded in the secondary market, and there may be some risks in the liquidity of funds. When investors need to redeem a large number of fund shares, they may face the situation that the shares cannot be realized immediately or the redemption price is affected by market fluctuations.
Operational risk: novice investors lack experience and understanding of the market when buying funds, and may cause losses due to wrong trading timing, wrong fund selection or wrong investment decision. Therefore, novice investors should conduct sufficient market research and capital analysis to avoid blindly following the trend or being affected by short-term market fluctuations.
How should a novice buy a fund?
Set investment goals: determine your own investment goals and needs, including risk tolerance, investment time period, expected income, etc.
Understand the types of funds: understand different types of funds, and understand their characteristics, risks and benefits. Choose a fund type that meets your investment objectives and risk tolerance.
Fund product research: carefully study the fund products of each fund company, including the historical performance, investment strategy and expenses of the fund. Learn from information such as fund rating, evaluation and research reports.
How many kinds of expenses are involved in fund transactions?
Subscription fee (subscription fee): the subscription fee of a fund refers to the fee that investors need to pay when purchasing a fund. Subscription fees are usually calculated according to a certain proportion (such as a few ten thousandths), and the fees to be paid are determined according to the amount of investment. The specific subscription rate varies with fund companies, fund types and sales channels.
Redemption fee (selling fee): the redemption fee of a fund refers to the fee that investors need to pay when redeeming fund shares. The redemption fee is usually calculated according to a certain proportion, and the required fee is determined according to the redemption share or redemption amount. Some funds may have a "lock-up period" for redemption fees, and redemption during the lock-up period will generate additional fees.
Handling fee: the handling fee that may be involved in fund transactions, such as trading commission in the process of buying and selling. The calculation method and proportion of the handling fee will vary according to the specific brokers, fund companies or sales channels.
Management fee: the fund management fee is the fee charged by the fund company for managing the fund. Management fees are usually calculated according to a certain proportion of fund assets (such as annual rate or daily rate) to pay the operating expenses of fund managers, research teams and fund companies.
Trust fees: Some funds are structured as trust funds, and the fees that investors need to pay to trust companies are used for the custody and management of fund assets.
Please note that different fund products, fund companies and sales channels may have different fee structures and fee levels. Before buying a fund, it is recommended to know the cost information of the fund in detail and consult with investment professionals to understand the calculation method and relevant regulations of the specific cost.
Calculation method of fund purchase cost
Usually, it is calculated in the following way:
Buying cost = buying amount × subscription fee rate
Among them, the subscription amount refers to the investment amount when investors buy funds. The subscription rate is the proportion of subscription fees stipulated by the fund company, usually expressed in units of ten thousand. The calculated purchase cost will be deducted from the investor's purchase amount.
How much is the handling fee for the fund?
First of all, for open-end funds, the handling fee mainly includes subscription fee/subscription fee, redemption fee and sales service fee.
Subscription fee/subscription fee is charged when buying a fund. Under normal circumstances, the subscription fee is relatively high in the fund fee. However, due to the fierce competition in fund sales among major platforms, the subscription fees are basically discounted, and the lowest can even be reduced to 1%, so the actual handling fee for buying funds is relatively low.
The subscription fee is the handling fee for purchasing a new fund. The subscription fee is generally slightly lower than the subscription fee, but the subscription fee is generally not discounted, so the actual rate may be higher.
But there are also some funds that have no subscription fees and subscription fees.
Redemption fee is the handling fee charged when selling the fund. Although the redemption fee of the fund cannot be discounted like the subscription fee, it can be reduced or exempted. How much can be reduced depends mainly on the length of time the fund is held. The longer you hold it, the more you can reduce it, and the minimum can be reduced to 0, that is, there is no redemption fee.
Sales service fee is a fee charged only for funds that do not include subscription fee. For such funds, although there is no subscription/subscription fee, the sales service fee is equivalent to the subscription fee.