The minimum subscription rate is 20% off, and the fee will be reduced! Reduce fees! There are multiple funds amplifying their bidding products | rates | funds

Recently, multiple public funds have issued rate discount plans for some of their products, with some subscription rates being discounted by "20%", management rates approaching "30%", and custody rates being discounted by "50%", among others.

Several industry insiders have expressed that there is indeed room for optimization in domestic fund fees, and the overall decrease in fund fees can to some extent enhance the attractiveness of public funds, better play the role of public funds in resident wealth management, and promote the long-term development of the fund industry. At the same time, it is pointed out that for mini funds, the intention of intensive fee reduction and shell protection is obvious, and some products with sustained poor performance may not rule out the possibility of continuous loss of scale.

Fund intensive "fee reduction", with a minimum subscription rate of "20% off"

Recently, multiple public fund companies announced the reduction of management fees, custody fees, sales and service fees, and other fees for their fund products, and multiple products experienced simultaneous reductions in multiple fees.

On June 27th, the management fee rate and sales service fee rate of Class C fund shares of Wanjia Annual Hengrong Regular Open Bond Securities Investment Fund were adjusted, that is, the annual management fee rate of Wanjia Annual Hengrong was adjusted from 0.40% to 0.30%, and the annual sales service fee rate of Class C fund shares was adjusted from 0.40% to 0.30%.

On June 27th, Golden Eagle Fund announced that the company has decided to lower the subscription rate for holding mixed A-class fund shares for six months starting from June 27th. Except for subscription fees of 1000 yuan per transaction when the subscription amount is not less than 5 million yuan, the subscription rate for subscription amounts below 5 million yuan after adjustment is only one-fifth of the before adjustment. The subscription rate for subscription amounts below 1 million yuan will be discounted by 20%.

On June 26th, Taixin Fund announced that it would lower the management rate and custody rate of Taixin Xinli Hybrid Fund. Starting from today, the management rate of the fund will be lowered from 1.2%/year to 0.4%/year, and the custody rate will be lowered from 0.2%/year to 0.1%/year. Equivalent to a two-thirds reduction in management fees and a 50% discount on custody fees.

Changxin Fuquan Pure Bond and Poly Bond recently announced a simultaneous reduction in management fees, custody fees, and C-class fund share sales service fees. The reduction in management fees and custody fees for both bond bases is 50% or more.

The reporter noticed that the scale of the above-mentioned fee reduction funds is relatively small, for example, Wanjianian Hengrong had a scale of 164 million yuan as of the end of the first quarter. In addition, although the operation time of Taixin Xinli Hybrid A has exceeded 6 years, due to poor product performance, the fund size is classified as "mini", with less than 5 million yuan as of the end of the first quarter. In addition, at the end of the first quarter, the scale of two bond bases, Changxin Fuquan Pure Bond and Poly Bond, had just exceeded 10 million yuan.

An industry insider in Shanghai stated that mini funds have significantly reduced their management fees, some of which may be due to shell protection considerations, facilitating the entry of funds and avoiding the liquidation of their mini funds. Some products with consistently poor performance also do not rule out the possibility of continuous loss of scale. In addition, regulation has been guiding fund companies to prudently declare and issue high-quality daily operations to avoid damaging investor interests and industry reputation with too many mini funds. Especially since last year, regulatory oversight has been supervising fund companies to more effectively and effectively address this issue.

The reporter noticed that in addition to mini funds, some funds with a scale exceeding 1 billion have also intensively reduced fees, such as Guolian An Currency, Zhongrong Currency, Changxin Changjintong Currency and other commodity funds, Baijia Baiyi Bond, and China Merchants Anfu 1-year fixed opening bond initiation style bond funds, all of which have adopted varying degrees of reduction in fund fees.

Over 120 products have been "cost reduced" within the year

Against the backdrop of relevant policies guiding public funds to benefit investors, many fund products have lowered their management fees since the beginning of this year.

According to Wind data, as of June 27th, 125 products have lowered their management rates during the year. From the perspective of product types, the number of first tier bond based products is the highest, with 27 announced downgrades within the year. Secondly, there are 20 medium - and long-term pure bonds, 14 international bond bases, mixed bond products, and commodity bases, and 10 flexible allocation products. However, there are less than 10 types of products such as short-term bonds and passive index funds that have lowered management fees this year.

When it comes to the rationality and optimization space of fixed management fees for public funds, an industry insider in Shanghai said that whether compared horizontally with other asset management institutions or internationally, the rates for mainland products are basically within a reasonable range. But a mature and effective market should encourage fee rate innovation. Through floating management fees or fee rate innovative products, on the one hand, it can motivate fund companies to continuously improve their investment and research capabilities, reduce operating costs, and on the other hand, continuously protect investor interests and optimize investment experience, thereby increasing overall market participation and activity.

Wang Rui, Director of Morningstar Fund Research Center, believes that there is room for optimization in domestic fund management fees. During the more than 20 years of vigorous development of domestic funds, the management fees of various types of funds in the United States have been decreasing year by year, while the fees in China have remained unchanged. A considerable part of the reason behind this is that in recent years, the proportion of channel sales expenses has been relatively high. In order to gain more channels, fund companies have to pay more trailing commissions to maintain sales channels.

"The fixed management fee for public funds has been implemented for many years, and a floating management fee model has been attempted before, but has not been effectively promoted. The core challenge behind it is that public funds face the general public, and excessive incentives may lead to fund companies and fund managers pursuing short-term performance, ultimately causing harm to investors. Therefore, fixed management fees are more suitable for public funds." Sun Wanlong, former executive of public funds and founder of the Financial Self Media Matrix, said that compared with overseas asset management institutions, there is indeed room for the management fee of domestic public funds to be reduced. For example, the premium rate of stock funds in American mutual funds has decreased by nearly half since 2000, from 1% to around 0.5%.