If the market is not good, or the fund is in a downward trend, investors can choose cash dividends, so that investors can get some cash, reduce their own losses and save redemption fees; If the market situation is good, or the fund is on the rise, investors can choose to reinvest with dividends, which can increase the share held by investors, improve the income and produce the effect of compound interest. At the same time, choosing dividends and reinvesting dividends can also save fund subscription fees.
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.
Fund dividends are divided into two ways: cash dividends and dividend reinvestment, in which cash dividends refer to fund companies distributing part of fund income to fund investors in cash; Dividend reinvestment means that when the fund pays dividends, the fund holders convert the cash from dividends into fund shares according to the net value of the fund on that day and then distribute them to investors.
According to the Measures for the Administration of the Operation of Securities Investment Funds, if the investor does not specify the dividend distribution method, the default income distribution method is cash dividend. Investors can go to the institution where you bought the fund to modify the dividend distribution method before date of record.
For example, if you hold 6,543,800+shares of a fund, each fund share will receive a dividend of 0.05 yuan: if you choose the cash dividend method, then the basic people will receive a cash dividend of 0.5 million yuan; Assuming that dividends are reinvested and the net value of fund shares on the dividend base date is 1.25 yuan, then the citizen can be divided into 5,000 yuan1.25 yuan/share = 4,000 fund shares, and the fund shares will become104,000. As the total assets of the fund decreased due to dividends, the net value of the fund decreased after dividends.
The default dividend method of open-end funds is cash dividend, but the basic people can change it independently according to the individual's specific situation and the changes in the fund market. When changing the dividend distribution method, the consignment customer needs to bring his ID card and securities card to the consignment agency that originally purchased the fund for modification; Direct selling customers can modify themselves through the fund company's website or telephone trading system.