Fund split and fund dividend?

Fund split and fund dividend? I understand it all at once! Buy a fund for so long or just look at the net value of the fund? In addition to the daily net value, the fund has other ways to improve the expected annualized expected return. You can see it immediately after reading the following article.

1, capital split

It is a way to recalculate fund assets, but keep the total assets of investors unchanged. There is no substantial impact on the rights and interests of investors.

After the spin-off, the net value of the fund unit decreased, but the fund share increased, so the total assets remained unchanged. For example, if the net value of a fund drops from 2.0000 yuan to 1.0000 yuan, but the number of shares increases from 500 to 1000, then the total assets will remain unchanged at 1000.

What is the significance of capital splitting? In fact, this is one of the marketing methods of fund companies. Ordinary investors always think that funds with lower net worth will have greater appreciation potential, and think that funds with higher net worth have higher risks. In order to dispel investors' thoughts, fund companies will split funds.

2. Fund dividends

There are two ways of fund dividend: cash dividend and dividend reinvestment.

The cash dividend of the Fund will be paid to the investor's account in cash, and no redemption fee will be paid. (Teach you that cash treasure closes his eyes to make money)

Dividend reinvestment is to reinvest cash dividends in the fund to obtain more expected annualized expected returns. That is, "rolling interest". The subscription fee for reinvestment can be exempted, and the fund share obtained by reinvestment can also enjoy the next dividend.

Different investment needs can choose different dividend methods: if the investor's investment period is not long and the current market environment is relatively volatile, it is more appropriate to choose cash dividend method. If the investment period is long, it is more appropriate to choose the dividend conversion method.

The significance of fund splitting: when the fund manager thinks that the fund size is too large to be conducive to investment operation, he will reduce the fund size through dividends. It is also to avoid short-term market risks and return some expected annualized expected returns through dividends. (Is the risk of fund financing big? What are the risks of buying a fund? )