I. Dividends and net value of the fund
Before discussing the issue of fund dividends, we need to understand the concept of fund net worth first. Fund net value refers to the asset value represented by each fund, and the change of net value will directly affect the fund's income. The fund company will include the interest, dividends and investment income of the securities held by the fund into the fund assets, and generally announce the net value of each fund regularly.
Fund dividend refers to the income distributed by the fund company to each fund holder. Fund companies can reinvest the fund's income, but most foundations choose to distribute part of the income to investors as dividends. In this way, the dividends received by investors will not affect the net value of the fund, because the dividend amount has been deducted from the total assets of the fund before the fund company pays dividends, so the dividend of the fund does not involve the investor's principal.
Second, the source of dividend income
The sources of fund dividends can be divided into two categories: one is the cash, dividends, bond interest and other income held by the fund; The second is the funds obtained by selling fund shares. In the process of fund holding, if the stock price of the securities held by the fund rises or pays dividends, it will bring certain benefits to the fund; At the same time, if the fund sells its stocks, bonds and other securities, the proceeds can also be used for dividends.
In short, fund dividend is one of the income distribution methods provided by fund companies for investors, and usually does not involve the principal of investors. Dividends received come from the proceeds of securities held by the fund and the funds obtained from the sale of securities.