Closed-end funds can also pay dividends. The so-called closed-end fund is not allowed to purchase or redeem at will during the closed period. Closed-end funds are generally open on a regular basis and have a fixed open day. The fund can only be redeemed on the open day. So what is the dividend policy of closed-end funds? Let's get to know each other.

Closed-end fund dividend regulations

1 closed-end fund dividends can only be cash dividends. Because the fund size of closed-end funds has been determined before issuance, the fund size is fixed after issuance and within the specified period, so dividends can only be paid in cash, and dividends cannot be reinvested.

The dividend requirement of closed-end funds is not less than 90% of the realized income of the fund in the current period, which is distributed to fund holders in cash.

For closed-end funds with long-term discount trading, dividends can play a role in enhancing the investment value of funds. Because the dividends of closed-end funds enhance the investment value, closed-end funds are favored by funds before a large proportion of dividends, and the discount rate will be greatly reduced. However, in practice, investors should pay attention to whether the discount reduction degree of closed-end funds overdraws the dividend promotion degree in advance.