Fund dividends are a problem often encountered in fund investment. To simply understand, the fund will pay dividends only when it makes a profit. Therefore, in theory, fund dividends are a good thing for investors. However, many investors have found that after the fund pays dividends, the fund will pay dividends.

The account shows a loss instead, so why do fund dividends lose money?

1. The Principle of Fund Dividends If you want to understand why fund dividends will lose money, you must first understand the principles of fund dividends.

Assume that an investor buys a fund with a net value of 1 for 1,000 yuan and has 1,000 fund shares.

Subsequently, the net value of this fund rose to 1.5, so at this time the investor's fund assets also became 1,000 shares * 1.5 = 1,500 yuan.

If the fund company decides to distribute dividends at a rate of 0.1 yuan per fund share at this time, the dividends available to the investor will be 1,000 shares * 0.1 = 100 yuan.

But at the same time, the net value of the fund after dividends will also decrease by 0.1 and become 1.4, which means that after dividends, the investor's fund assets will become 1,000 shares * 1.4 = 1,400 yuan.

After the dividend is distributed, the assets in the fund account plus the dividend of 100 yuan are exactly 1,500 yuan, which is no different from the total assets before the dividend.

This is the essence of fund dividends. The funds in the dividends are originally the investors' assets, but the storage location has been changed. The investors' total assets have not changed before and after the dividends are distributed.

2. Why does a fund lose money when it pays dividends? There is obviously no change in assets after dividends are paid, so why is it shown as a loss?

This has to do with the way the fund distributes dividends.

There are two ways to distribute fund dividends: cash dividends and dividend reinvestment.

Cash dividends are to remit dividend funds to bank cards in cash, while dividend reinvestment is to convert dividends into corresponding fund shares for reinvestment.

However, regardless of cash or fund shares, there is a time difference of 1-2 days between the arrival date and the dividend date.

In other words, the net value of the fund will fall on the day of dividend distribution, and it will take a few days for the dividend to arrive. Therefore, on the surface, it seems that the fund will suffer a short-term loss after the dividend is distributed.

I hope the above content about why fund dividends lose money will be helpful to everyone.

Warm reminder, financial management is risky, so investment needs to be cautious.