1. When the market is bad or the fund is in a downward trend, the fund pays dividends. At this time, it is better to choose cash dividends, because it can be safe at this time and keep some income.
2. When the market bottoms out or the market improves, it is best to choose dividend reinvestment, because reinvestment will buy a certain share of dividend money. If the market outlook rises, the more profit you will get from the stock. Moreover, at this time, the fund that chooses to reinvest dividends does not need to pay the subscription fee.
Fund dividend means that the fund distributes part of the income to fund investors in cash, which is originally a part of the net value of the fund unit. People usually refer to funds mainly as securities investment funds.
brief introduction
Fund dividend means that the fund distributes part of the income to investors in cash, which is originally a part of the net value of the fund unit. According to the Interim Measures for the Administration of Securities Investment Funds, fund management companies should distribute at least 90% of the net income of funds in cash once a year. The "Interim Measures" have expired, and how to allocate them now is subject to the provisions of the Fund Contract.
Dividends are not as much as possible. Investors should choose a dividend distribution method that suits their own needs. Fund dividend is not the biggest standard to measure fund performance. The biggest criterion to measure the fund's performance is the growth of the fund's net value, and dividends are just the cash for the growth of the fund's net value.
For open-end funds, if investors want to realize income, they can also redeem part of the fund shares to achieve the effect of cash dividends; Therefore, whether the fund pays dividends and the number of dividends will not have a significant impact on investors' investment income.
For closed-end funds, it is sometimes not feasible to realize fund income by selling fund shares because the unit price of the fund is often different from the net value of the fund. In this case, fund dividends become the only reliable way to realize fund income. Investors should pay more attention to dividends when choosing closed-end funds.
situation
According to relevant regulations, fund dividends need to meet the following three conditions:
First, the fund can only be distributed after the income of the current year makes up for the loss of the previous year;
Second, after the distribution of fund income, the unit net value cannot be lower than the face value;
Third, if the fund investment has a net loss in the current period, it cannot be distributed.