Is the money fund income compound interest?
1. If the money fund income invested by investors is generated by dividends and distributed in cash, that is, dividends are distributed directly to investors' bank cards in cash, there will be no compound interest effect.
2. If the income of the money fund is generated through dividends and distributed through dividend reinvestment, this part of the income will be converted into fund shares, which will increase the holding share of investors, thus generating a compound interest effect.
Monetary fund income is calculated as follows:
The monetary fund's income calculation unit is each income, not the net value of each income commonly used by other funds. Each income refers to the amount of current income obtained from each monetary fund subscription. For example, if the current earnings per share is 0.0 1 yuan, then the current earnings of investors holding 1000 money funds are 10 yuan.
Monetary funds usually use the seven-day annualized rate of return to calculate the income, that is, after all the income within seven days is accumulated, it is calculated in an annualized way, and finally the seven-day annualized rate of return of each share is obtained. For example, if the subscription price of a monetary fund is 1 yuan, and the income after one week is 0.0 1 yuan, the annualized income for seven days is (0.011) * (365/7) =18.33%.
It should be noted that the seven-day annualized rate of return is not necessarily the actual rate of return of the money fund, because the rate of return of the money fund may change at any time. Seven-day annualized rate of return is only used as a reference index to calculate income, and investors should pay attention to long-term return on investment.