What Is a Fee-Based Investment?
A fee fund is a mutual fund that collects selling expenses or commissions. Fund investors pay this fee to compensate for the efforts of sales intermediaries in choosing the right fund for investors. Most funds are fee-based funds, and many funds that originally only used direct sales have increasingly relied on sales by third parties and intermediaries, thereby shifting from fee-free funds to fee-based funds. [1]
Fee fund
Right!
- Chinese name
- Fee fund
- Foreign name
- Pay Fund
- Complex
- Fee fund
- Explanation
- Investors pay fees when buying or selling fund certificates
- A fee fund is a mutual fund that collects selling expenses or commissions. Fund investors pay this fee to compensate for the efforts of sales intermediaries in choosing the right fund for investors. Most funds are fee-based funds, and many funds that originally only used direct sales have increasingly relied on sales by third parties and intermediaries, thereby shifting from fee-free funds to fee-based funds. [1]
- Paid and non-paid funds
- Funds can be divided into fee-based funds and non-chargeable funds based on whether investors need to pay sales expenses when buying or selling fund certificates. Selling expenses refer to fees collected for fund promotion and brokerage commissions. Selling expenses can be divided into two types, one is the subscription fee, which is the handling fee paid when purchasing the fund; the other is the redemption fee, which is the handling fee collected when buying back the fund. Generally speaking, the subscription fee is the former fee, and the redemption fee is the latter fee.
- Non-charged funds are funds that investors do not need to pay for sales expenses when purchasing funds. However, such funds generally charge a small amount of redemption fees to prevent frequent redemptions.
- In general, most funds today are fee-based funds.
- Both fee and non-charge funds are open-ended funds.