The cost of open-end fund includes direct cost and indirect cost. Direct costs include subscription fees, subscription fees and redemption fees generated in the process of subscription and redemption, which are directly borne by investors; Indirect expenses refer to the expenses incurred in the operation of the fund, such as the above-mentioned expenses paid to fund managers, custodians, sales organizations and other parties, as well as the expenses stipulated by laws, regulations and fund contracts.
1, direct cost:
(1) subscription fee/subscription fee
Subscription fee refers to the handling fee paid by investors when they subscribe for funds during the fund issuance and raising period, and subscription fee refers to the handling fee paid by investors when they subscribe for funds during the fund duration (i.e. daily subscription period). The purpose of charging subscription fee/subscription fee for open-end funds is mainly used for commission and publicity and marketing expenses of sales organizations.
(2) Redemption fee
Redemption fee refers to the handling fee paid by investors when they sell their fund shares to fund managers during the existence of open-end funds. Redemption fee is mainly a compensation mechanism for other fund holders, which is usually included in the fund assets.
2. Indirect costs:
(1) Fund management fee
Fund management fee refers to the fee paid to the fund manager (fund management company), that is, the remuneration collected by the manager for managing and operating the fund. The management fee is accrued daily and paid by the custodian to the fund manager in one lump sum from the fund assets at the end of the month.
(2) Fund custody fee
Fund custody fee refers to the fee charged by the fund custodian for providing services to the fund, such as the fee drawn by the bank for keeping and disposing of the trust property of the fund. Custody fees are usually accrued on a daily basis and paid to the custodian on a monthly basis. This fee is also paid from the fund assets and does not need to be charged to investors separately.
(3) Fund operating expenses
The operating expenses of the Fund include payment of CPA fees, attorney fees, annual membership fees, printing and production fees for interim and annual reports, and handling fees for buying and selling securities. These expenses and expenses are paid as the operating cost of the fund, which accounts for a small proportion of the net asset value.