Generally speaking, in order to encourage investors to hold for a long time, fund companies set the redemption fee as the holding period is longer, the rate is lower, or even free.

As for why fund companies are set up in this way, San Sijun believes that the main income of fund companies comes from fund management fees. Imagine if investors redeem their own funds, how can fund companies collect management fees?

Therefore, many fund companies will set redemption fees in this way.

In addition, it should be reminded that it is best not to buy and sell funds frequently. According to the Regulations on Liquidity Risk Management of Public Offering of Open-end Securities Investment Funds issued by the CSRC, except for money funds and transactional open-end index funds, investors who have held for less than 7 days (natural days) will be charged a redemption fee of not less than 1.5%, which is what many people call "punitive redemption fee".