For example, Xiao Wang holds a fund 10000. When the net value of the fund is 2.0 yuan, the fund company pays dividends. If you choose to distribute cash, 0.5 yuan will be distributed every 10, and Xiao Wang's investment account will be increased by 500 cash, and the net value of the fund will be adjusted accordingly, with a net value of 1.95 yuan and a market value of 1950.
It should be noted that investors can enjoy dividends only if they still hold the fund on the fund dividend registration date, otherwise they can't enjoy dividends. At the same time, the fund can enjoy dividends only if it meets the following conditions:
1, the fund can only be distributed after the current year's income makes up for the previous year's losses;
2. After the distribution of fund income, the unit net value cannot be lower than the face value;
3. If the fund investment has a net loss in the current period, it cannot be distributed.
After dividends, there is no need to pay personal income tax. Dividends can be divided into cash dividends and dividend reinvestment. Cash dividend means that the fund company distributes part of the fund income to fund investors in cash. Dividend reinvestment means that when the fund pays dividends, the fund holders convert the cash from dividends into fund shares according to the net value of the fund on that day and then distribute them to investors.
Generally speaking, in the case of bad market conditions or declining funds, investors can choose cash dividends, so that investors can get some cash, reduce their own losses and save redemption fees; When the market is good, or the fund is in an upward trend, investors can choose to invest in dividends, which can increase the share held by investors, improve the income and produce the effect of compound interest. At the same time, choosing dividends and investment dividends can save fund subscription costs.