What Is a Redemption Fee?

The fund redemption fee refers to the handling fee paid by an investor who already holds fund units to the fund manager during the duration of the open-end fund. Redemption fees are usually included in fund assets.

Redemption fee

The redemption fee refers to the fee deducted from the redemption by the investor when the fund is redeemed. The calculation formula is:

Total Redemption = Number of Redemptions × Net Fund Unit Value on the Redemption Date

Redemption Fee = Total Redemption x Redemption Rate

Redemption Amount = Total Redemption-Redemption Fee

According to Chinese law, the redemption fee rate must not exceed 3% of the redemption amount. The vesting of the redemption fee income stipulated by each fund may be different. Some regulations only deduct a small fee, and most of it will be returned to the fund. All; some regulations are used in whole or in large part for handling fees, and do not return or only a small part of the fund assets, so if you partially redeem, the former approach is more beneficial to investors, in the same way Under the circumstances, the net value of fund units held by investors will be higher than the latter.