In daily life, many investors who invest in fund products will be very happy when they meet the dividend of fund products. After all, this is equivalent to having a real sum of money in their pockets. Then, do you know why the principal of the fund will decrease after the cash dividend? Is the fund cash dividend a good thing or a bad thing?

Why is the principal of the fund less after the cash dividend?

After the cash dividend of the fund, the principal is reduced, so part of the principal is converted into cash dividend and enters the investor's bank account. As we all know, fund dividend refers to the distribution of part of the income to fund investors in cash, which is part of the net value of the fund unit. This is equivalent to the fact that when the fund company adopts the cash dividend method, part of the principal enters the investor's bank card in the form of dividend, which makes investors intuitively think that the principal in their fund account has decreased, but in fact only part of the principal in the fund account has been transferred to the bank card.

Is it good or bad?

It doesn't matter whether the cash dividend of the fund is good or bad, it just transfers a part of the net value of the fund unit to investors. For investors, their personal assets do not increase or decrease, and they cannot bring any benefits to investors. But for investors who want to stabilize their income or need money urgently, it is a good thing for the fund to pay dividends in cash. After all, the actual money will go into the investor's account.

In addition, fund dividends generally indicate that fund companies have better profitability and will attract many investors to buy funds, so it is a good thing for fund management companies.