it'sabouttimecrash| From 5 million to 0.01 yuan, Rongtonghui Caibao significantly lowered the minimum subscription amount for B shares

Reporter du Meng

Different shares of money funds are hidden in the cost of sales? TodayIt'sabouttimecrashRongtong Caibao Monetary Fund issued a notice suspending the automatic upgrade and downgrading business and adjusting the minimum purchase restrictions for the shares of Class B funds.

The announcement shows that the minimum amount for a single purchase of Class B shares will be lowered to 0 from the previous 5 million yuan.It'sabouttimecrash.01 yuan, which undoubtedly opens the door for individual investors.

In addition, the announcement also suspended the automatic upgrading and downgrading of fund shares. The so-called automatic upgrade and downgrade means that when the class A shares retained by investors in a single fund account reach or exceed 5 million, the registration institution of the fund will automatically upgrade all category A shares to category B shares.It'sabouttimecrashWhen the share of category B is less than 5 million, all of them will be downgraded to category A. After this suspension, there will be no restrictions on the minimum share of Class B funds.

According to Wind data, by the end of the first quarter of this year, the shares of Rongtong Treasure Monetary Fund An and B were 5. 5% respectively.It'sabouttimecrash.38 billion yuan, 6.075 billion yuan. According to the 2023 report, the proportion of individuals holding category A shares of the fund is 98.83 per cent, while the proportion of institutions holding category B shares is 99.55 per cent.

According to the fund contract, the shares of Rongtong Caibao Monetary Fund An and B do not charge subscription fees, subscription fees and redemption fees, and the annual management fee is 0.2% / year and the escrow fee is 0.05% / year. The only difference is that category A share will charge a sales service fee of 0.22% per year.

As early as the rise of the Internet consignment platform in 2019, a number of public money funds cancelled the automatic rise and fall of their shares.

Talking about the original intention of setting up automatic upgrading and downgrading rules for funds, a person from the head of the public offering products department in Beijing said that in general fund product design, there are different fee rules for customers with different amounts of capital: for example, the starting point of sales of base A share is relatively low, but the sales service fee is high, which is aimed at ordinary investors. B share mainly corresponds to institutional customers and more than 5 million of major customers, B share has a high starting point, but the sales service fee is very low, so that institutional funds can enjoy low rates with the advantage of large funds.

"generally speaking, only customers with a capital of 5 million can enjoy a relatively low sales service rate of goods-based B share, and many companies have reduced the sales starting point of goods-based B share to the same level as that of goods-based Class A. in this way, investors do not need to have 5 million to enjoy a lower rate of B share, which is also a measure to benefit investors." The above-mentioned person said.

According to Wind data, as of May 27, there are 553 funds (counting only a single share) in the market to collect sales service fees, including 362monetary funds, 81 passive index bond funds and 29 mixed bond first-tier funds.

For money funds, goods-based category B sales service rates are lower and A rates are higher. From the interest-driven perspective of fund sales agencies, fund sales institutions are more willing to sell products with higher fund sales service rates for fund companies. For example, driven by interests, some consignment agencies do not support automatic promotion or downgrade, and only choose to sell A shares on a consignment basis, which may prevent A-share holders with investments of more than 5 million from getting rate concessions.

The interface news reporter learned from the channel that in addition to the fund sales service rate, canceling the cargo-based automatic upgrade and downgrade business is also an important consideration to avoid customer complaints.

A person from a medium-sized public market department in South China said that in practice, the goods-based automatic upgrading and downgrading business is a high incidence area of customer complaints. For example, some customers have applied for 5 million of the purchase base B share, and recently redeemed 2 million, and the holding share has become 3 million. However, the holding fund is automatically downgraded to the goods base A share, which requires more expensive sales and service fees, which also leads to a strong backlash and incomprehension from customers.

"abolishing this rule may touch the 'cheese' of the fund consignment platform," the person said. "for example, if clients apply for B shares, if the fund is automatically converted to A shares, investors will have a poor experience and will not understand this practice. Abolishing the upgrade and downgrade rules will hand over investment options to investors, avoid the consignment platform based on interest-driven damage to the interests of investors, and will also be of great benefit to reduce customer complaints and enhance investor experience. "