There are two ways of fund dividend, namely cash dividend and share dividend. Cash dividends are directly converted into cash and transferred to investors' accounts. So what's the difference between share dividends and cash dividends?

The difference between fund share dividend and cash dividend

The biggest difference between fund cash dividend and share dividend is the different meaning. Cash dividend means that the funds are directly credited to the user's account, and share dividend means that the user pays dividends and buys the same fund, thus exempting the user from the fund subscription fee.

It should be noted that the fund does not need to pay dividends every year, and the fund does not pay dividends every year. Fund companies need to meet certain standards in order to pay dividends. There is no clear time requirement for fund dividends, mainly depending on the announcement issued by the fund company and the profitability of the fund. When a fund company pays dividends to the fund, it will generally issue a dividend announcement in advance, which will clearly inform users of the dividend time and the amount that each user can get from the dividend. If a fund company wants to pay dividends to the fund, it needs to meet the corresponding conditions at one time, otherwise it can't pay dividends. Fund dividends are sometimes a way for fund companies to control the net value of funds. When the fund pays dividends, the unit net value of the fund will drop significantly, which can also attract users to invest.