Under normal circumstances, the better the performance of the fund, the more dividends. For many citizens, it seems that they can get an extra income, but what is the fact? What are the ways of fund dividends? Today, we will talk about some contents about fund dividends.

How many ways are there for fund dividends?

1 Cash dividend: Cash dividend refers to the direct transfer of dividend funds to the investor's bank account in cash at the time of distribution, which is also the default dividend payment method. If you are not optimistic about the following market conditions, or just need money, then choosing cash dividends can lock in the income and settle down.

2 dividend reinvestment: this means that the dividend money will be automatically converted into fund shares according to the net value of fund shares on the ex-dividend date of the fund, and the reinvested part will not be charged our subscription fee. Therefore, for investors, if they don't want cash dividends and think that the fund will rise in the later period, they can modify the dividend and reinvest it, which is equivalent to obtaining a new fund share without subscription fee. For long-term investors, this is a good way to pay dividends.

Through the above introduction, we find that the fund can get cash for free or increase the fund share, but is this really the case? Is the fund dividend really extra income?

In fact, the fund's dividend money is taken out from the fund's income, but part of the income is distributed to the fund's investors in the form of dividends. In essence, we share our own money, so in fact, dividends themselves will not increase our income. You can't simply think that a fund is a high-quality fund because it pays more dividends.