Is the fund conversion cost-effective?
Fund conversion is cost-effective.
Investors need to bear the redemption fee of the former fund and the subscription fee of the latter fund at the same time before purchasing a new fund. If the fund changes, you only need to bear the redemption fee of the former fund and the subscription fee of the latter fund to make up the difference, which can save money.
For example, investors originally held a stock fund, and the subscription rate of the fund was 0. 15%, and the redemption rate was 0. 1%. Now it is a bond fund, and the subscription rate of this bond fund is 0.06%. Then you only need to bear the redemption fee of the stock fund, because the difference between the subscription rates of the two funds is negative, so you don't need to pay the subscription fee of the bond fund.
In addition, fund conversion can save trading time, and the confirmation time of fund conversion is generally T+ 1, that is, the application for conversion is submitted on T day, and the result is confirmed on the next trading day. Direct redemption and re-purchase take longer.
Fund conversion conditions:
(1) Two synchronous open-end funds sold by the same sales organization and registered by the same registrant;
(2) Open-end funds with front-end charging mode can only be converted into funds with other front-end charging modes, and funds with zero subscription fees default to front-end charging mode;
(3) Funds with back-end charging mode can be converted into funds with other front-end or back-end charging modes.
Generally speaking, fund conversion is more cost-effective. When the fund held is poor, investors can choose a fund with better performance through fund conversion. Of course, if investors feel that the risk of the fund they hold is too high, they can convert it into a fund with lower risk.