Fund dividends: Does every fund have dividends?
No, not every fund has a dividend. There are three conditions for fund dividends. First, the net income of the fund after dividends cannot be lower than the face value; The second is that when there is a net loss in the current period, the fund cannot pay dividends; The third is that the fund's income in the current year can make up for the loss in the previous year before it can pay dividends. The fund needs to meet these three conditions at the same time before it can pay dividends.
When the fund pays dividends, the fund company will notify investors a few days in advance. In the fund dividend announcement, it will explain the time of fund dividend and the amount that investors can distribute this time. Fund dividends seem to give investors income, in fact, the total number of investors has not changed. For investors, dividends are neither lost nor earned, because the funds distributed by the fund are their own gains, and dividends are like putting money in the left pocket into the right pocket.
Although the fund dividend has not changed, it can reduce the net value of the fund, and the net value of the dividend fund will be reduced once every time. Therefore, the fund dividend can be said to reduce the investment risk to some extent. For most investors, the higher the net value of the fund, the more dangerous it is, and there is a great retreat at any time, but dividends solve this problem well.
How about a fund that pays dividends regularly?
A fund that can pay dividends regularly shows that the profitability of the fund is very strong, because dividends can only be paid if there is no loss in the net income of the fund in the current period, which shows that the performance of the fund is very good. But this does not mean that a fund that pays dividends regularly is a good fund, which needs comprehensive analysis from many aspects.