What is a redemption fee (or exit fee) and when might it apply?

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Multiple Choice

What is a redemption fee (or exit fee) and when might it apply?

Redemption fees are charges applied when you redeem (sell back) fund units within a short period after you bought them. The idea is to discourage quick, short-term trading that can impose costs on the fund and other investors. The fee is triggered only if you redeem within a defined time window set by the fund (for example, within 30 or 90 days of purchase). If you hold the investment past that window, you won’t pay the fee. This is different from a fee charged at purchase (a front-end load), an annual ongoing charge, or a fee tied to the fund’s internal sale of its assets. The redemption fee’s purpose is to protect the fund’s liquidity and long-term investors by reducing churning.

Redemption fees are charges applied when you redeem (sell back) fund units within a short period after you bought them. The idea is to discourage quick, short-term trading that can impose costs on the fund and other investors. The fee is triggered only if you redeem within a defined time window set by the fund (for example, within 30 or 90 days of purchase). If you hold the investment past that window, you won’t pay the fee. This is different from a fee charged at purchase (a front-end load), an annual ongoing charge, or a fee tied to the fund’s internal sale of its assets. The redemption fee’s purpose is to protect the fund’s liquidity and long-term investors by reducing churning.

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