What Is a Fund Subscription

A fund subscription is the process by which an investor purchases units in an open-ended fund during the fund's offering period, before the fund has been established. The subscription price is usually the nominal value of the fund units (US$1) plus a sales charge. To subscribe to a fund, investors should complete a subscription application form at the point of sale of the fund and pay for the subscription.

How to subscribe to a fund
There are four types of fund subscription methods: online cash subscription, offline cash subscription, offline portfolio subscription and online portfolio subscription.

Online cash subscription refers to subscriptions made by investors in cash using the Exchange's online system through the fund manager's designated offering agent.

Off-line cash subscription refers to subscriptions made by investors in cash through the fund manager and its designated offering agent.

Off-line portfolio subscription refers to subscriptions made by investors in portfolio securities through the fund manager's designated offering agent.

Online portfolio subscription refers to subscriptions in portfolio securities made by investors through the fund manager's designated offering agent using the Exchange's online system.

How to subscribe for a fund
1) Investors who have an account with a securities company that is qualified to distribute a new issue fund can directly transfer funds to their fund account and subscribe for the fund on the securities company's trading software.

2) The fund account of a bank that has a certain new issue fund distribution qualification can be subscribed directly to the bank counter.

3) Subscribe at the direct sales point of the newly issued fund company.

4) If the newly issued fund allows online subscription, you can subscribe on the fund company's website.
If the investor is the first time common knowledge, to subscribe to the fund, you need to choose one of the ways, first do the account opening procedures.

Fund subscriptions and subscriptions
The difference between fund subscriptions and subscriptions
The fund purchase is divided into a subscription period and a subscription period. The first time a fund offers shares is called a fund offer, and the act of buying shares during the fund offer period is called a fund subscription, which is generally a maximum of one month. An investor who applies to purchase shares of a fund after the close of the offer period is usually called a subscription to the fund. Subscriptions made during the fund offering period will generally enjoy certain rate discounts. For example, the subscription rate is 1.0% and the subscription rate is 1.5% for purchases of up to $1 million of Qualm Competitive. However, funds purchased during the subscription period are generally redeemable only after a closed period, a time used by the fund manager to build up positions and cannot be bought or sold, whereas funds purchased by subscription can be redeemed on the second business day.

Which is better, subscriptions or subscriptions?
Subscription is suitable for "white horse" funds
As the subscription fund has a closed period of several months, these months is almost no operating income, and out of the closed period, the level of operation of the fund is not known, so, when choosing the subscription method, you must subscribe to the fund for in-depth understanding, including the expected investment composition of the fund, the reputation of the fund company, the fund manager qualifications, etc., if you think this fund is a potential If you think the fund is a potential "white horse", then you can boldly use the subscription method. In addition, the same fund, subscription and subscription rates are not the same, the fund company in order to pursue the first issue, the subscription rate generally lower than the subscription rate.

For example, the subscription rate for a fund of 50,000 yuan is 1%%, while the subscription rate is 1.8%%, a difference of 0.8%% percentage points. Therefore, from the point of view of saving fees alone, a good look at a fund, should try to choose to subscribe at the time of issue.

You can avoid "stepping on a mine" by subscribing
Now there are more and more people prefer to buy funds by subscription, because the subscription method, in case the fund is not sure, it is likely to step on the "landmine", to their investment caused by large losses. The subscription method, however, allows you to wait and see how the fund performs after it comes out of its closed period. Although the subscription fee is more expensive, but after all, you can try to avoid and mitigate the investment risk. Especially for money funds, because after entering the open period, the fund will be announced daily 7-day annualized return, the return of each fund is a large gap, in this case, a comprehensive assessment, the best subscription will be more conducive to improve investment returns.

"Curve" subscriptions can be changed to subscriptions
Once the subscription or subscription way to buy funds, should not be redeemed and replaced in the short term, which is an important obstacle is to come back to the redemption, subscription rates are high, but currently the major fund companies in order to attract investors, the company's conversion of various funds is preferential. In addition, the money fund regardless of subscription, subscription or redemption are free, so the flexible use of these two resources, to "curve" the way to subscribe to invest in open-end funds can achieve the purpose of convenient replacement, saving costs. Take a fund for example, according to the fund company's regulations, the company's money fund can be converted into a stock fund or balanced fund, the conversion rate is only 1%, while the direct subscription of these two funds, subscription fees are in 1.5%% or more.

Therefore, first use the subscription or subscription way to buy money funds, and then convert your good stock fund or balanced fund, so that you spend the subscription money, but to achieve the financial effect of the subscription selection fund.