The cash dividend of the fund means that the income is directly given to you, and the dividend reinvestment means that the income is automatically repurchased into the fund, and there is no need for subscription fees and the like. Optimistic funds can choose to reinvest dividends. Everyone understands this truth, but how is this dividend reinvestment calculated?

How to calculate the fund dividend reinvestment?

Fund dividend reinvestment means that when the fund pays the dividend in cash, the fund holder directly purchases the fund with the cash obtained from the dividend. However, this process is indirect, and it is automatically calculated by the system without the investor's own operation.

For example, if you buy 1 0,000 shares of a certain fund, and each share of the fund pays a dividend of 0.05 yuan, then you can get a share in 50 yuan. On the day of dividends, the net value of this fund is 5 yuan, so you can use this 50 yuan to buy 10, and finally your total share is 1.050.

The calculation formula of fund dividend reinvestment: dividend/net value = increased share. For fund managers, there is no cash outflow from dividend reinvestment, so dividend reinvestment usually does not charge subscription fees. If investors want to invest more after receiving cash dividends, they will be regarded as new subscriptions and need to pay subscription fees. Therefore, choosing dividend reinvestment is conducive to reducing the cost of investors.

When the fund pays dividends, if you are optimistic about this fund, it is recommended to choose dividends for reinvestment. If you want to sell or lack money, you can choose cash dividends. Investors have absolute freedom in this respect.