Under normal circumstances, the redemption fee of the fund is calculated step by step. The longer you hold the fund, the lower the redemption rate. Many funds are held for more than one year without redemption fee, which is one of the reasons why we support the long-term holding of funds, which can reduce the transaction cost of funds.
When redeeming the fund, the redemption fee shall be deducted from the redemption money.
Redemption fee = total redemption amount x redemption rate,
Total redemption amount = number of redemption shares x net value of fund unit on redemption date.
According to the laws of our country, the redemption rate shall not exceed 3% of the redemption amount, and the redemption fee income stipulated by each fund may be different. The final destination of this money will be detailed in the prospectus of the fund.
Some regulations only deduct a small amount of expenses, most of which will be owned by the fund, while others stipulate that all or most of them will be regarded as expenses, and only a small part will be listed as fund assets. Obviously, the former approach is more beneficial to investors.
For example, the redemption fee of the fund is stipulated as follows:
For investors with a continuous holding period of less than 30 days, the redemption fee is fully included in the fund property; For investors with a continuous holding period of less than 3 months, not less than 75% of the total redemption fee is included in the fund property; For investors with a continuous holding period of more than 3 months but less than 6 months, not less than 50% of the total redemption fee shall be included in the fund property; For investors with a continuous holding period of more than 6 months, not less than 25% of the total redemption fee is included in the fund property.
The part not included in the fund property is used to pay the registration fee and other necessary handling fees.