In the investment market, fund products can be said to be very hot in recent years, and funds also have the advantages of low risk and stable income, so they are favored by consumers. The following is a comparison of fund front-end fees and back-end fees collected by Bian Xiao in 20021year _ the difference between fund front-end fees and back-end fees. I hope I can help you.
Comparison between front-end charges and back-end charges of funds
The front-end charging mode of 1 is normal charging mode. When investors purchase, they will calculate the purchase fee at one time. When investors redeem for some reason in the future, they only need to pay the redemption fee according to the regulations. It has a significant disadvantage, that is, the share that investors get after buying is often unsatisfactory and fragmented because of deducting related expenses.
The back-end charging mode is for fund companies to encourage investors to hold for a long time, and avoid the fluctuation of fund scale caused by frequent trading of investors in advance, which will affect the normal operation of fund managers. With the increase of investors' holding time, the number of back-end charges gradually decreases until they are exempted.
The introduction of back-end charging mode is an innovation of fund charging mode, which is conducive to promoting the development of fund industry.
1 First of all, the back-end charging model can meet the different needs and preferences of investors in design. Fund investors can choose to buy their own funds according to their own financial situation.
Secondly, the back-end charging model can reduce the investment cost of investors and improve the return on investment of investors. For the same investment amount, the fund share obtained by the back-end charging model is higher than that by the front-end charging model. With the increase of fund unit net value and dividends, the more shares, the higher the income.
The back-end charging model encourages the long-term holding of funds and can promote the asset stability of fund companies. As the back-end fee decreases with the extension of the holding period, the back-end fee model is conducive to encouraging investors to hold funds for a long time, promoting the stability of fund companies' assets, reducing the short-term redemption pressure of funds, and benefiting the investment and management of fund managers.
Finally, the introduction of the back-end charging model shows that the services of open-end funds are becoming more and more detailed, which accelerates the internationalization of the fund industry.
The difference between fund front-end charges and back-end charges
In practice, there are two ways for open-end funds to collect subscription fees, one is called front-end fee, and the other is called back-end fee. Front-end charge refers to the payment method of paying the subscription fee when you buy an open-end fund. Back-end charge refers to the payment method of not paying the subscription fee when buying an open-end fund and then paying it when selling it. The differences between the two are as follows:
1, different in nature: the front-end charge is the payment method of paying the fee at the time of subscription, and the back-end charge is the payment method of waiting for redemption.
2. Different concessions: the front-end handling fee rate is relatively low, generally 0.6%, and the back-end handling fee rate is relatively high, generally 1.5%.
3. Different functions: front-end charges are suitable for short-term investment, while back-end charges are suitable for long-term investment.
Is the fund front-end available balance a share?
It is understood that the fund front-end balance refers to the fund share after paying the handling fee before buying, while the fund back-end balance is the fund share without deducting the handling fee. It can also be understood that the front-end available balance depends on the status of your fund, whether it is held or sold.
Fund, in English, refers to a certain amount of funds set up for a certain purpose. It mainly includes trust and investment funds, provident funds, insurance funds, retirement funds and funds of various foundations. From the accounting point of view, capital is a narrow concept, which refers to funds with specific purposes and uses.