Fund dividends are reinvested according to the net value of fund shares on the equity registration date. Dividend reinvestment is a way of fund dividend (the other is cash dividend), which means that when the fund pays dividends, the cash from the fund dividend is used to purchase the fund and increase the share of the original fund.
Funds can be divided into broad sense and narrow sense. Broadly speaking, they refer to a certain amount of funds set up for a certain purpose, such as trust and investment funds, provident funds, retirement funds and so on. In a narrow sense, they refer to funds with specific purposes and uses. Usually, funds mainly refer to securities investment funds. The income of securities investment funds comes from the future, and the performance of the income is inseparable from the performance of the investment target market, which has certain risks.
Generally speaking, the reinvestment of fund dividends is confirmed according to the net value on the equity registration date. Usually dividend reinvestment refers to dividend reinvestment share = (fund share held × cash dividend ratio), and the net value of fund share on the equity registration date. The net value of a fund unit refers to the value of each fund and is an indicator to measure the value of the fund. Net fund share = total net fund assets/total fund share. Generally, the purchase and redemption of open-end funds are calculated at this price, which investors can learn from.
There are several different types of securities investment funds.
(1) According to whether the fund unit can be increased or redeemed, it can be divided into open-end funds and closed-end funds. Open-end funds are not traded on the market (as the case may be), but are purchased and redeemed by banks, brokers and fund companies, and the fund scale is not fixed; Closed-end funds have a fixed duration and are generally listed and traded on the stock exchange. Investors buy and sell fund shares through the secondary market.
(2) According to different organizational forms, it can be divided into corporate funds and contractual funds. A fund is established by issuing fund shares to establish an investment fund company, which is usually called a corporate fund; The establishment of fund managers, fund custodians and investors through fund contracts is usually called contractual funds. China's securities investment funds are all contractual funds.
(3) According to different investment risks and returns, it can be divided into growth funds, income funds and balanced funds.
(4) According to different investment objects, it can be divided into stock funds, bond funds, money market funds and futures funds.