The essence of fund dividend is to distribute part of fund income to investors in cash. This part of the income was originally yours, but it was originally included in the fund share, and it is still cost-effective to cash it out for you now.

It's not like the fund company gives you money alone.

After cash distribution, the unit net value corresponding to the original fund share naturally becomes smaller.

So, why pay dividends?

First of all, if the fund wants to pay dividends, it needs to meet some conditions:

1. Dividends in this period can only be paid after making up the losses in the previous period;

2. After dividends, the net value of each fund share cannot be lower than the face value (the face value is the net value of the unit at the time of issuance, generally 1 yuan);

3. When there is a net loss in the current period, dividends cannot be distributed.

Generally speaking, funds can only pay dividends if they make money.

In principle, laws and regulations and fund contracts will stipulate that dividends will be paid at least once a year, provided that the above three conditions are met.

Fund companies generally have the following purposes:

1, reduce the unit net value.

Yesterday's article mentioned this point in order to make the fund look "cheaper", because many people who don't know the truth buy the fund with net worth.

2. Marketing tricks

After all, the fund can only pay dividends if it makes money. "Dividends" sounds good, so the fund company will tell investors that my performance is good through regular dividends.

Of course, if fund companies use "dividend" propaganda too much, they will also incur penalties from the regulatory authorities, because "dividend" is a neutral event for investors.