For open-end funds, at present, many fund companies provide investors with two options: cash dividend and dividend reinvestment, as follows:

(1) cash bonus

If the investor chooses the cash dividend method, the dividend will be transferred from the fund custody account to the bank deposit account designated by the investor on the dividend day. Dividend reinvestment is provided by the fund management company to investors, and the dividends obtained are directly reinvested in the services of the fund, which is equivalent to the distribution of income by listed companies in the form of stock dividends.

(2) Dividend reinvestment

For investors who want to reinvest dividends directly, it is more suitable to reinvest dividends. After dividend reinvestment is selected, dividend funds will be converted into corresponding fund shares and credited to investors' accounts, and reinvestment fees are usually exempted. In fact, investors get assets on their books through dividends, which is equivalent to falling from their left hand to their right hand, which is also the reason for the decline in the net value of fund units on the day of dividends.