Dividends are dividends paid to investors by joint-stock companies every year according to a certain proportion of their share in profits. It is the return on investment of listed companies to shareholders. Dividend is a way to distribute the current year's income to shareholders after withdrawing statutory provident fund, public welfare fund and other items according to regulations. Usually, after receiving dividends, shareholders will continue to invest in the enterprise to realize compound interest.
Ordinary shares can enjoy dividends, and preferred shares generally do not enjoy dividends. A joint-stock company can only distribute dividends when it is profitable.
Fund dividend refers to the distribution of net investment income to fund holders. The net income of the fund refers to the balance of the fund income after deducting the expenses that can be deducted from the fund income according to the relevant regulations, including dividends, bonuses, bond interest, price difference between buying and selling securities, bank deposit interest and other income.
Fund dividend means that the fund distributes part of the income to fund investors in cash, which is originally a part of the net value of the fund unit. Therefore, investors actually get the assets on their books, which is why the net value of fund shares fell on the day of dividends (ex-dividend date).
Fund dividends and income: The more dividends, the better. Investors should choose a dividend distribution method that suits their own needs. Fund dividend is not the biggest standard to measure fund performance. The biggest criterion to measure the fund's performance is the growth of the fund's net value, and dividends are just the cash for the growth of the fund's net value.
For open-end funds, if investors want to realize income, they can also redeem part of the fund shares to achieve the effect of cash dividends; Therefore, whether the fund pays dividends and the number of dividends will not have a significant impact on investors' investment income.
For closed-end funds, it is sometimes not feasible to realize fund income by selling fund shares because the unit price of the fund is often different from the net value of the fund. In this case, fund dividends become the only reliable way to realize fund income. Investors should pay more attention to dividends when choosing closed-end funds.
Cash dividend: cash dividend is a direct cash dividend, which does not need to pay redemption fee and is tax-free, that is, it is safe to leave the bag;
Dividend reinvestment: reinvesting cash dividends in the fund, commonly known as "accumulated interest", can not only avoid the subscription cost of reinvestment, but also enjoy the next dividend of the fund share obtained by reinvestment.