Fund dividend means that the fund distributes part of its income to investors. Since the fund wants to pay dividends, the premise is that it needs to have income. Many investors find that their fund is losing money, but this fund still insists on paying dividends. So why should the fund pay dividends when it loses money?

Why do fund losses pay dividends?

Although the premise of fund dividend is income, this income is not necessarily the current income, but also the previous income. The fund used to make money, but you bought it at the wrong time, just when the fund fell, so you lost money. Therefore, although the fund's current income is not good, as long as it has been profitable before and there is no loss, it can still pay dividends, but the dividend ratio may be reduced.

Fund dividends are not extra income, which is equivalent to putting the money in the investor's left pocket into his right pocket. Fund dividends will not make investors gain or lose. The total assets of investors remain unchanged, and the net value of the fund decreases accordingly after the fund pays dividends.

Fund dividends are divided into two ways: cash dividends and dividend reinvestment. Cash dividend means that the fund company distributes part of the fund income to fund investors in cash. Dividend reinvestment means that when the fund pays dividends, the fund holders convert the cash from dividends into fund shares according to the net value of the fund on that day and then distribute them to investors. The way of fund dividends is chosen by investors themselves.

Fund dividend conditions:

1, which can be distributed after 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.