With the continuous development of China stock market, closed-end funds have become the choice of more and more investors. In fund investment, the dividend method is an important consideration. So, how does the dividend distribution in closed Public Offering of Fund operate? This paper analyzes it from many angles.

I. Types of dividend distribution methods

There are two main ways to pay dividends for closed-end funds: cash dividend and dividend reinvestment. Cash dividend means that the fund manager will remit the dividend profit directly to the bank account of the share holder after deducting taxes and fees. Dividend reinvestment means reinvesting dividends in fund shares in the form of compound interest investment. The two dividend distribution methods have their own advantages and disadvantages, and they should be weighed according to their own needs when choosing.

Second, the influencing factors of dividend yield

Dividend rate refers to the specific proportion of fund dividends, including dividend ratio and dividend reinvestment share. Dividend rate is closely related to the growth rate of fund net value and rate of return. When the net growth rate of the fund is high, the dividend rate of the fund will also increase accordingly. In addition, the operating expenses and taxes of fund managers will also affect the dividend rate. Therefore, investors should pay attention to the management ability of fund managers when choosing funds.

Third, the advantages of dividend reinvestment.

Dividend reinvestment refers to reinvesting dividends in fund shares in the form of compound interest investment. This method mainly has the following advantages:

1. Improve capital gains. Dividend reinvestment can reinvest the income into the fund and improve the capital income of the fund.

2. Low cost. Dividend reinvestment does not need to pay additional transaction costs, which can save investors' expenses

3. The longer the holding time, the better the effect. Long-term holding of dividend reinvestment share can obtain compound interest effect, and the effect of compound interest effect will become more and more obvious with the passage of time.

Fourth, the advantages of cash dividends.

Cash dividends also have some advantages:

1. Provide regular cash income. For investors who need cash flow, cash dividends can provide regular cash income.

2. Low risk. Cash dividends can make investors get considerable dividend income when the fund goes down and reduce investment risks.

3. Flexible investment. Cash dividends can be retrieved at any time, which improves capital liquidity and makes investment more flexible.