Is it better to choose the front end or the back end to buy funds? Which is the right choice for investors facing such problems? I would like to give you a brief explanation of this problem and hope it can help you.
A friend asked: What does it mean to buy funds with front-end charges and back-end charges? Which is better?
The front end said that when buying funds, it will charge a subscription fee, usually 1% - 1.5%. Redemption fees are charged when selling funds, usually 0.5%. However, redemption fees are usually waived when holding funds for 1-2 years.
The back-end said that no subscription fee will be charged when buying funds, but a fee will be charged when selling funds. If the fund is held for a short time, it is usually 1.5% - 2%. The longer the holding time is, the lower the fee will be. Generally, the fee will be waived when holding funds for 3-5 years.
Is it more cost-effective to choose the back-end? In fact, there is no discount when buying and selling funds in the early stage, so it is more cost-effective to choose the back end for long-term investment. But now many fund platform subscription fees are discounted, so there is little difference between front end and back end. And many funds do not have back-end varieties, so we can choose front-end when investing.
