Investment funds need to pay fees, and open-end funds have two ways to pay fees: front-end mode and back-end mode. Front-end charges refer to the subscription fees paid by investors when they buy, and back-end charges refer to the fees paid by investors when they sell. So which is better, front-end charging or back-end charging?

Which is better, fund front-end charge or back-end charge?

Front-end charging and back-end charging are suitable for different investors, mainly depending on investment habits.

1 The back-end charging method is more suitable for long-term investors, because the back-end charging rate will generally decrease with the growth of the funds held.

The charging method in the first paragraph is more suitable for short-term investors. When investors redeem later, they will no longer consider deducting the relevant subscription fees, which is free and convenient. The front-end subscription rate generally decreases with the increase of subscription amount.

In short, when choosing a fund, you can choose the charging mode according to your preference for holding time. In addition, if it is a fund traded on the floor, its transaction costs have no front-end and back-end, but adopt the same charging model as stocks.