Dividend dividend means that the fund distributes part of the income to fund investors in the form of cash or fund shares, which is originally a part of the net value of the fund unit. In other words, paying dividends is equivalent to putting the money from the base people into the right pocket. The following are the benefits of fund dividends brought by Bian Xiao, hoping to help you!

What are the benefits of fund dividends?

1) The funds that can pay dividends are all profitable, which proves that they are bought correctly. Under normal circumstances, the loss of funds is unable to pay dividends.

2) When paying dividends in cash, there is no need to charge redemption fee, which can not only ensure the original share unchanged, but also realize part of the income.

3) When dividends are reinvested, they are converted into fund shares, and subscription fees are not charged for this part, which reduces the transaction costs of investors and enjoys the "compound interest" of investment.

What kinds of dividend distribution methods does the fund have?

1) cash dividend. As the name implies, only cash is taken when dividends are distributed. After the dividend is over, the cash is normally transferred to the bank card bound to the fund account.

2) Dividend reinvestment. Continue to use the dividend money to buy the fund you hold, and your share of the fund will eventually increase.

How to choose the way of fund dividend?

1) If investors are not optimistic about the market outlook for the time being, but optimistic about the long-term management ability of the fund, they can choose cash dividends. Compared with direct redemption, cash dividend on the one hand reduces the total assets of the fund and increases the cash income, on the other hand, it also avoids the cost of redemption.

2) If investors are optimistic about the market outlook and the future of the fund, then dividend reinvestment is a good choice.

What are the benefits of fund dividends?

1 personal income tax and enterprise income tax are not levied on the income from fund distribution. In other words, fund dividends have certain tax incentives for holding investors.

After adopting the operation mode of fund dividend, the fund management team is more sensitive to the operation, and it is easier to obtain investment income after the market improves.

3. You can lighten your position and reduce the net value of the fund without violating the provisions of the fund, and you don't need to pay redemption fees to get a return on funds through dividends, which can save investors' transaction costs.

What is the significance of fund dividends?

1. lighten the position and lock in the income.

Like equity funds, it is generally required that the proportion of equity positions is not less than 80%. When the market is at a high point, in order to lighten the position, the fund manager will help investors lock in the income through fund dividends and effectively lighten the position.

2. Reduce the scale and manage effectively

If the scale of fund management is too large, it will be more difficult for fund managers to manage. Because the fund dividend is to distribute a part of the net assets of the fund to investors, the size of the fund will be reduced and the management difficulty will be reduced after the dividend. It can be managed effectively, but too small is not a good thing.

3. Reduce net worth and attract customers.

After the fund pays dividends, the net value of the fund will drop, which will give investors a cheap feeling, especially for some small white novices, the attraction will be greatly improved. Of course, with the widespread popularization of basic people's financial knowledge, the financial management of purchasing funds through the net value of funds should also be reduced.

How to choose the dividend method?

Anyone who has bought a fund knows that there are two ways to pay dividends: cash dividends and dividend reinvestment. Which one should we choose? Mainly need to combine their own conditions and market conditions for comprehensive judgment. If you have sufficient funds and are optimistic about the market outlook, you can choose dividend reinvestment, and there is no subscription fee for dividend reinvestment, which can reduce the investment cost. If there is a shortage of funds and you are not optimistic about the market outlook, you can choose to pay dividends in cash and then lighten your position to reduce the downside risk.

Funds with excellent performance may not necessarily pay dividends, but funds with dividends usually have good performance. Of course, the selection of funds needs to be comprehensively considered according to the indicators such as fund performance and fund manager. Finally, investors need to be reminded that the fund is risky and investment needs to be cautious.

What are the benefits of fund dividends?

The essence of fund dividend is to distribute part of fund income to fund investors in cash. As we all know, this part of the dividend is part of the net value of the fund unit, and the wool is on the sheep. Dividend-sharing funds only convert some fund assets into cash, and the amount of dividends received by investors will reduce the corresponding fund assets, while the corresponding income will not change because of cash dividends.

Why should fund companies pay dividends: First, they can reduce their positions without violating the provisions of the fund; Second, it can reduce the net value of the fund, which looks cheaper and can attract investors to buy; Third, dividends are also a publicity stunt, and dividends are often better publicized. For example, when the stock market rose from 2000 to 4000, it almost reached its peak, and Fund A should release its position. However, in the public offering of funds, there are regulations that require maintaining certain positions. In addition, at this time, the net value of fund A may be 3, while the new fund only has 1. It sounds like Fund A is too expensive. Ordinary investors usually prefer to buy cheap funds. At this time, the dividend of fund A can not only lighten the position, but also make the fund cheaper.

The impact of fund dividends on investors: first, if the stock market falls in the later period, dividends can help investors avoid the risk of a sharp decline in the market and achieve the effect of profit taking; Second, if the market prospects continue to rise, dividends will make some capital investors miss the opportunity to rise and lose the opportunity to increase their assets.

Conclusion: The dividend of the fund depends on the later trend of the fund. Need to analyze specific problems, choose cash dividend or dividend reinvestment. Ps: There is no reinvestment fee for dividend reinvestment, and no fund redemption fee for cash and dividends.

A. When the market falls, choose cash dividends to avoid the risk of market decline and avoid redemption fees.

B. when the market rises, choose to reinvest in dividends.

C. Fixed investment of the fund: choose dividends and reinvest. If you make a fixed investment when paying cash dividends, take out the assets of the fund and invest through the fixed investment of the fund. You know, this will waste the subscription fee.

D. closed-end funds: closed-end funds can't be redeemed, and they can enjoy part of the benefits brought by dividends.

Note: Dividends must be reinvested. If the subscription fund has just paid the subscription fee, the cash dividend will become cash in a few days, which is equivalent to wasting the subscription fee.