What is the significance of reducing the net value of fund dividends?
1 Safety in advance. If it is a cash dividend, investors can take out a sum of money in advance, so that the income will be safer, and in the case of a large withdrawal of funds, the income of fund holders will be avoided.
2 Raise awareness that fund companies that do not pay dividends may not be recognized by novice investors, because many investors only buy those funds that pay dividends and think that dividend-paying funds are good funds.
3 The rising space is increased, and the decrease of net value after dividends means that the rising space of this fund is increased. In addition, the higher the net worth, the lower the subscription share.
4 reduce the scale, the bigger the fund, the better. After the cash dividend is implemented, the size of the fund will be slightly reduced, so that the fund manager can control the scale.
5. Adjust the investment strategy, and distribute part of the income to investors through dividends, which is equivalent to letting investors redeem some funds and allowing fund managers to lighten their positions without violating the regulations.
The meaning of fund dividends is roughly the above. Actually, it doesn't mean much to investors. Fund dividends are either the share of money or the share of this fund. If you are not optimistic about this fund, or need money recently, choose cash dividends. If you are optimistic about this fund for a long time and have plans to continue holding it, you'd better choose to reinvest with dividends, because you can save the handling fee for re-buying.
Whether the fund pays dividends or not is not the standard to judge the quality of the fund, so when screening the fund, don't think that the more dividends the fund pays, the better. However, it should be noted that although a fund with dividends is not necessarily a good fund, a fund with dividends shows that its performance is good, and performance is a criterion for judging whether it is a good fund.