The net income of the fund refers to the balance of the fund income after deducting the expenses that can be deducted from the fund income according to the relevant regulations, including dividends, bonuses, bond interest, price difference between buying and selling securities, bank deposit interest and other income.
Fund dividend means that the fund distributes part of the income to fund investors in cash, which is originally a part of the net value of the fund unit. Therefore, investors actually get the assets on their books, which is why the net value of fund shares fell on the day of dividends (ex-dividend date).
Fund dividends and income: The more dividends, the better. Investors should choose a dividend distribution method that suits their own needs. Fund dividend is not the biggest standard to measure fund performance. The biggest criterion to measure the fund's performance is the growth of the fund's net value, and dividends are just the cash for the growth of the fund's net value.
For open-end funds, if investors want to realize income, they can also redeem part of the fund shares to achieve the effect of cash dividends; Therefore, whether the fund pays dividends and the number of dividends will not have a significant impact on investors' investment income.
For closed-end funds, it is sometimes not feasible to realize fund income by selling fund shares because the unit price of the fund is often different from the net value of the fund. In this case, fund dividends become the only reliable way to realize fund income. Investors should pay more attention to dividends when choosing closed-end funds.
Cash dividend: cash dividend is a direct cash dividend, and there is no need to pay redemption fee, and it is tax-free, that is, it is safe to leave the bag.
Dividend reinvestment: reinvesting cash dividends in the fund, commonly known as "accumulated interest", can not only avoid the subscription cost of reinvestment, but also enjoy the next dividend of the fund share obtained by reinvestment.
According to relevant regulations, fund dividends need to meet the following three conditions:
First, the fund can only be distributed after the current year's income makes up for the previous year's loss.
Second, after the distribution of fund income, the unit net value cannot be lower than the face value.
Third, if the fund investment has a net loss in the current period, it cannot be distributed.