What are the costs involved in investing in a foundation?

In the process of fund investment , certain handling fees will also be incurred, such as fund transaction fees and fund operation fees.

1. Fund transaction fees

Fund transaction fees refer to the fees incurred during the fund transaction process and are also the first fees faced by investors. Transaction fees are an umbrella term that includes the following aspects:

① Subscription fee. If investors purchase fund shares during fund issuance and fundraising , they need to pay subscription fees. Subscription fee calculation formula: Subscription fee = Subscription amount × Subscription rate. The subscription rate is usually around 1%. The fund management company will have a certain discount based on the amount subscribed by investors .

② Subscription fee. Subscription fee refers to the handling fee paid by investors to purchase fund units during the duration of the fund. Calculation formula: Subscription fee = Subscription amount × Subscription rate. Like the subscription fee, the subscription rate is generally around 1%. Depending on the amount subscribed by investors, the fund management company will have a certain discount.

③ Redemption fee. It is the fee that investors pay when they sell shares of the fund. After the redemption fee occurs, it will not be owned by the fund management company, but will be included in the fund assets. This is a compensation mechanism, mainly to encourage investors to hold the fund for a long time.

④ Conversion fee. Switching fee refers to the fee incurred by investors to switch between different fund varieties of the same fund management company according to their own trading wishes.

2. Fund operating expenses

Fund management companies need costs from the initial product design to the launch of intermediate products, to the operation and maintenance of the final product. Fund management companies package these costs into fund operating expenses. Fund operating fees are generally not charged separately, but are directly deducted from fund assets. Only two of the following are directly relevant to investors:

①Fund management fee refers to the remuneration obtained by the fund manager for providing professional services to investors and helping investors to actually operate the fund assets. The fund management fees of different funds are quite different, which are mainly determined according to the risk characteristics of the fund, and are accrued according to a certain proportion of the net asset value of the fund. For example, the management rate of money funds with the lowest risk is 0.33%; for high-risk bond funds , the management rate is about 0.65%; the management rate of stock funds with higher risk is 1% to 1.6%.

②Fund custodian fee : refers to the fee charged to the fund after the bank and other custodian institutions provide services. Custody fee is generally drawn at a certain percentage of the net asset value of the fund unit, generally 0.25%. It is accumulated daily and paid to the custodian on a monthly basis.

③ Sales service fee: the fee charged by the fund company , which is mainly used to support the promotion and marketing of the fund. For the general sales service fee and the subscription fee (subscription fee), the fund company only chooses to charge one. If a sales service fee is charged, the subscription fee (subscription fee) will no longer be charged.