The so-called fund dividend is to convert some fund assets into dividend distribution holders after the fund realizes the net investment income. The net income of the fund refers to the balance of the fund income after deducting the expenses that can be deducted from the fund income according to the relevant regulations, including dividends, bonuses, bond interest, price difference between buying and selling securities, bank deposit interest and other income. In addition, the fund dividend must meet the following conditions: 1, and the fund can not be distributed until the current year's income makes up for the previous year's losses. 2. After the distribution of fund income, the unit net value cannot be lower than the face value; 3. If the fund investment has a net loss in the current period, it cannot be distributed. In addition to the requirements of relevant laws and regulations, the dividends of the Fund shall be distributed in accordance with the income distribution clauses in the prospectus. In April, 2009, "Guidelines for Auditing Income Distribution Clauses of Securities Investment Funds" made detailed provisions on fund dividends. The guideline contains five clauses. For example, when designing fund products with dividend clauses, fund management companies should stipulate the maximum number of fund income distributions each year and the minimum proportion of each income distribution in the fund contract and prospectus; When applying for products, a fund company shall stipulate the relevant contents of the fund income distribution plan, and at least specify the distributable profit at the end of the fund period, the target of fund income distribution, the distribution time, the distribution amount, the proportion and the distribution method. At the same time, the dividend distribution time is defined, and the time from the dividend distribution date to the benchmark date of income distribution (that is, the calculation deadline of distributed profits) shall not exceed 15 working days.
There are two ways of fund dividend: cash dividend and dividend reinvestment. Investors are free to choose when buying funds. 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. The cash dividend is the fund share you hold multiplied by the dividend amount distributed by each fund. At present, the state does not levy income tax on dividend income from securities investment, so the dividend income you get is equal to the cash dividend distributed. If dividend reinvestment is selected, the cash dividend from the dividend will be automatically converted into fund units for reinvestment according to the net asset value of the fund units on the dividend payment date specified in the dividend announcement. Need to be reminded that the fund shares obtained by dividend reinvestment are free of subscription fees, which can help your long-term investment to obtain higher returns. If investors continue to be optimistic about the future performance of this fund, investors can choose to reinvest in dividends; If you see the performance of other funds of the company or the funds of other fund companies, you can use the cash after dividends to invest in other funds; If you are optimistic about bank wealth management products, you can also make corresponding investments; If the stock market is risky, you can also invest in bond funds or deposit them directly in the bank. Investors have the autonomy to choose the dividend distribution method and how to invest after dividend distribution.
For open-end funds, whether cash dividends are beneficial to investors depends on the timing of dividends and the subsequent net value trend. But it is different for closed-end funds. After paying dividends, the discount rate of closed-end funds will increase significantly. If the discount rate rises rapidly, the secondary market price of closed-end funds is likely to increase due to the requirement of discount rate return. This is called dividend arbitrage effect. The higher the unit dividend amount, the more obvious the dividend arbitrage effect. Therefore, in general, dividends of closed-end funds are beneficial to investors, and the higher the dividend amount, the better. Whether the fund pays dividends is not the main criterion to judge whether the fund is worth investing. If the investment ability of the fund is strong, the fund with dividends will help investors maximize their investment income in the long run. Of course, under certain market conditions, such as a bear market, if the fund pays dividends, it will harm the interests of investors.
Do good funds need to pay more dividends? Is it a good fund with more dividends? The growth rate of net worth is the only criterion to judge the investment value of funds. Some funds pay dividends frequently, but the net growth rate is low after reinstatement, which is not a good fund; On the contrary, some funds do not pay dividends for a long time, but the cumulative net growth is among the best. Such funds are still excellent funds.
Should I buy the fund before or after the dividend? Since the fund income distributed by dividends is a part of the fund's net value, the fund's net value will be relatively low after dividends. Is it more cost-effective to buy? Assuming that there is no market fluctuation between date of record and dividend reinvestment date, there is no difference in the assets owned by investors whether they buy before or after dividends. This is because, although the subscription before dividends can get dividends and be converted into fund shares, the subscription after dividends can buy more fund shares with the same subscription amount due to the decrease of the net value of the fund. How much dividends will be paid, and the net worth will be reduced accordingly. For example, a person's net worth should have been 1.248. If the dividend and ex-dividend are both 0.004 yuan, the net value becomes 1.244. Therefore, for refundable funds, in fact, dividends are divided into their own money. Some people vividly say that "dividend is to put your money from your left pocket to your right pocket", which is actually a little cheap: there is no redemption fee for the dividend amount. Investors don't have to pay too much attention to dividends.