In the process of fund sales and operation, some expenses will occur, which will be borne by fund investors and used to pay for the services provided by fund managers, fund custodians, sales agencies and registration agencies. The investor-related expenses involved in fund operation are mainly divided into the following two categories:

(1) The expenses directly borne by the fund investors.

This fee refers to the one-time payment made by investors when they conduct fund transactions. For closed-end funds, like buying and selling stocks, a certain percentage of commission is paid outside the price. For open-end funds, it mainly refers to subscription fee and redemption fee.

1. Subscription fee refers to the fee that investors need to pay for purchasing fund shares, which is mainly used to pay marketing expenses such as sales expenses and advertising fees to fund sales institutions. It can be charged when investors buy fund shares, that is, the subscription fee is charged in advance, or it can be charged when investors sell fund shares, that is, the subscription fee is charged afterwards, and the rate is generally decreasing according to the holding period.

2. Redemption fee: refers to the fee paid by investors when they sell their fund shares. Redemption fee is different from subscription fee, which is sales commission, while redemption fee is the fee charged for redemption. The subscription fee income after collection is dominated by the fund management company, and the redemption fee income belongs to the fund.

(ii) Operating expenses of the Fund

Fund operating expenses refer to the expenses incurred during the fund operation, mainly including management fees, custody fees and other expenses, which are directly deducted from the fund assets.

1. Fund management fee: the fund management fee is the remuneration paid to the fund manager, which is generally calculated on a daily basis according to a certain proportion (annual rate) of the net asset value of the fund, extracted from the fund assets and paid regularly. Fund management fee is the main source of income for fund managers. The fund manager's own expenses cannot be spread into the fund or fund company, nor can they be charged to investors. Daily management fee = calculated daily fund net asset value × management rate ÷ days of the year.

2. Fund custody fee: Fund custody fee refers to the fee charged by the fund custodian to the fund or fund company for providing custody services for the fund. Custody fees are usually drawn according to a certain proportion of the fund's net asset value, calculated and accumulated daily, and paid to the custodian regularly. Custody fee accrued daily = net asset value of the fund on the calculation day × custody rate ÷ days of the year.

3. Other expenses include registration fee, seat rental fee, securities trading commission, lawyer's fee, accountant's fee, information disclosure fee, holder's meeting fee, etc.

Operating expenses are an important cost in capital operation. The operating expenses of funds with different investment strategies vary greatly. The above operating expenses and charging methods shall be announced in the fund prospectus.