Save the procedure of redeeming first and then buying the fund. Which fund do you like can be settled directly through fund conversion? Of course, the handling fee can't be saved. How much should it be?

Sometimes when we buy a fund, we will find that there are fund conversion projects.

So what's the use of fund conversion?

Under what circumstances can the fund be converted?

After investing in Public Offering of Fund, if the fund stops making profits, or we are not satisfied with the performance of this fund investment, we will generally redeem it. When we plan to redeem other fund products invested in the same fund company, we can use the business operation mode of fund conversion.

The so-called fund conversion means that investors can directly convert their fund shares into those of other open-end funds managed by the same fund company after holding an open-end fund issued by a Public Offering of Fund company, without redeeming the fund shares held in their hands first and then purchasing them after getting cash.

For example, you own an open-end fund of E Fund. Then you earn almost, and if you want to sell it and replace it with another open-end fund of E Fund, you can use the fund conversion.

What are the benefits of fund conversion business compared with our first redemption and then subscription?

Efficiency is greatly improved, because under normal circumstances we redeem open-end funds. It will take three to four days from the time we apply for redemption to the time when the funds arrive. After we get the cash, we need two trading days to apply for the fund until the stock is in place. We need six to seven days to redeem and reinvest.

For fund conversion, we only need to submit the application for fund conversion two days later, that is, two days later, the fund share of this position can be received after we convert it.

Therefore, in terms of transaction efficiency, fund conversion will be much more efficient than the business model of redemption first and then subscription. The higher the efficiency, the shorter the time for our funds to be idle outside the market.

So this is very important for investment, and the second advantage is that it can save money.

Because the fees charged for fund conversion are somewhat special, normally, when we buy a fund, we will charge the front-end subscription fee first, and a redemption fee will be charged when we redeem it, so the subscription and redemption fee are necessary.

If we do the redemption first and then the subscription, it means that we have to pay the subscription and redemption fee of the first fund and the subscription fee of the second fund newly purchased.

Then, if we transfer from the first fund to the second fund, we will first charge our subscription fee for investing in the first fund, then charge the redemption fee for the first fund for transferring to the second fund, and then charge the subscription fee difference between the first fund and the second fund.

Suppose two ab funds are products of the same fund company, then the subscription rate of A fund is 0.8%, the redemption rate is 0.5%, the subscription rate of B fund is 1.0%, and the redemption fee is 0.5%.

At this time, I want to change from a fund to b fund. How much do I charge?

First of all, we see that the subscription rate of A is 1%, and the subscription rate of B fund is 1.0%, so there will be a difference of 0.2 between them. Therefore, when we convert, we must first charge the difference of 0.2, plus the redemption fee of 0.5% of Fund A, and finally charge the conversion fee of 0.7%.

Let's think about it. If I redeem Fund A first instead of converting it, I will be charged a redemption fee of 0.5% first, plus the subscription fee of compulsory fund 1.0%, which adds up to 1.5% here. If the subscription fee of 0.8% charged for the initial investment of Fund A is included, it will be charged 2 * *. We charged a conversion fee of 0.7% during the conversion, plus a subscription fee of 0.8% in the previous period, which added up to only 1.5%, which was obviously lower than the total cost of redeeming A first and then subscribing B.

Therefore, fund conversion can effectively help us reduce such a transaction cost.

But to do fund conversion, several conditions must be met. As I said just now, first of all, it must be the product of the same fund company.

Second, not only the products of the same fund company can be converted, but also the fund conversion can only be carried out in the same sales organization.

What do you mean?

Because not all sales organizations will sell all the products of the same fund company on a commission basis, if you buy product A in ICBC and want to convert it into product B of the same company, but ICBC does not sell product B of this company on a commission basis, CCB will sell it on a commission basis. At this time, we have no way to directly convert product A into CCB products.

Product A and product B must be sold by ICBC at the same time before they can be converted at ICBC.

Third, the same company must register in the same fund registration and settlement system if it wants to change funds.

The open-end fund registration and settlement system launched by China Securities Depository and Settlement, the index fund represented by CSI 500, and the love fund listed and traded are often registered on it.

Funds can only be converted if they are registered in the same settlement system.

As long as you look at the details of the funds you care about or hold, there must be a registration agency in the middle.

Fourth, funds with front-end charging mode can only be converted into funds with other front-end charging modes. Funds with back-end charging mode can be converted into other funds with front-end or back-end charging mode, and funds with zero subscription fee are regarded as front-end charging mode.