A little friend asked the fund about dividends. There are two ways of fund dividend, cash dividend and dividend reinvestment, but no matter which way of dividend, it is not an extra sum of money. What is the specific situation? Today, I'm going to give you a dividend from the popular science fund.

What does the fund dividend mean?

Fund dividend refers to a part of the expected income of the fund, which is distributed to investors in cash (cash dividend) or converted into fund shares (dividend reinvestment). Simply put, the expected return of this part of the fund is originally a part of the fund's net value. After the fund pays dividends, the net value of the fund unit will decrease, and the money on the book will become cash or extra fund shares, so investors will not get more expected returns because of dividends.

What are the conditions for fund dividends?

First, the expected income of the fund in the current year can make up for the losses in the previous year before the current dividend can be paid. The dividend-paying fund not only didn't lose money in that year, but also earned back the money lost in previous years.

Second, after the fund pays dividends, the net value of the fund unit cannot be lower than 1 yuan face value.

3. The fund investment loses money in the current period and cannot be distributed as dividends.

Generally speaking, funds can only pay dividends if they make money. However, it is up to the fund manager to decide whether to pay dividends in the end. Fund dividends can be divided into two ways: cash dividends and dividend reinvestment. Cash dividend is to directly transfer the funds into the subscription account, and dividend reinvestment is to automatically use this part of the money to purchase the corresponding fund shares.

If the current market is in a bear market, it is recommended to choose dividend reinvestment and enjoy long-term investment compound interest; If the current market is in a bull market, it is recommended to choose cash dividends for safety. Ok, so much for the cash dividend. I hope it helps you. Warm reminder, the stock market is risky and you need to be cautious when entering the market.