Fund income is the excess of the fund’s assets that exceeds their own value during operation. Specifically, fund income includes dividends, dividends, bond interest, spreads on buying and selling securities, deposit interest and other income from fund investments. It mainly includes the following parts:
(1) Dividend: It is the income from the fund’s net profit distribution due to the purchase of the company’s stocks. Generally speaking, companies distribute dividends to shareholders in two forms: cash dividends and stock dividends. As a long-term investor, the fund's main goal is to obtain long-term, stable returns for investors, and dividends constitute an important part of the fund's income. The amount of dividends from the stocks invested is an important criterion for fund managers to select investment portfolios.
(2) Dividends: refers to the fund’s income from the distribution of the company’s net profits due to the purchase of the company’s preferred equity. Dividends are usually stipulated in advance according to a certain ratio of fund income. This is the main difference between dividends and dividends. Like dividends, dividends also constitute an important part of investor returns, and the level of dividends is also an important criterion for fund managers to select investment portfolios.
(3) Bond interest: refers to the interest earned regularly by fund assets from investing in different types of bonds (treasury bonds, local government bonds, corporate bonds, financial bonds, etc.). my country's "Interim Measures for the Management of Securities Investment Funds" stipulates that the proportion of a fund's investment in government bonds shall not be less than 20% of the fund's net asset value. It can be seen that bond interest is also an indispensable component of investment returns.
(4) Securities spread: refers to the spread income formed when fund assets are invested in securities, usually also called capital gains.
(5) Deposit interest: refers to the interest income from bank deposits of fund assets. This part of the income represents only a small component of the fund's income. Open-end funds must keep a portion of their cash in the bank because they must be ready to pay redemption requests from fund holders.
(6) Other income: refers to the savings in costs or expenses caused by the use of fund assets, such as miscellaneous income such as transaction commission discounts received by the fund from securities firms due to large transactions. This amount of income is usually small.