Most of the income of domestic fund companies comes from management fees extracted from their funds. Management fees in a broad sense include subscription fees and redemption fees, fund management fees, custody fees and operation fees, among which fund management fees and part of redemption fees constitute the income of fund companies. At present, the domestic open-end funds basically adopt the fixed rate system, so the market discussion on fund fees is also centered on this charging model.
Fund management fee is the management remuneration paid to fund management companies and the most important source of income for fund management companies. There are three main collection modes.
Fixed fund management fee. That is, only the fixed remuneration of the fund manager is paid, which does not depend on the size and performance of the fund. The popularity of this fund management fee collection method is gradually decreasing, and only a few small-scale fund companies are still using this incentive system.
The collection method of fixed rate is to collect management fees according to the net assets of the fund. This is the most common way to collect fund management fees in the world.
Fund managers charge management fees according to a certain proportion of the net assets of the funds they manage, so the greater the market value of the funds, the more management fees they charge. At present, most open-end funds adopt this charging method.
The floating management fee collection mode is to collect management fees according to the fund performance. In this way, the management fee consists of fixed remuneration based on the fund's net assets and performance remuneration based on the fund's performance. The collection of performance compensation is usually to compare the income of the fund with the average rate of return in the securities market, and take this as the basis for collecting compensation. If it is above the standard, it will not get performance reward, or even negative performance reward.
To put it simply, when you buy wealth management products, you must first look at the way he collects management fees, whether he makes a commission according to the income, and whether it is worth buying.