1. Under what circumstances does the fund pay dividends?

The conditions for fund dividends are as follows: the current year's income of the fund can make up for the previous year's losses before distribution; After the distribution of fund income, the net share value cannot be lower than the face value; If the fund investment has a net loss in the current period, it cannot be distributed.

The open-end fund will determine the distributable income of the fund according to the fund assets in the latest open day, and publish the income distribution plan in the information disclosure newspaper designated by the China Securities Regulatory Commission before the dividend. The dividend date of open-end funds is not fixed, and there is no special regulation on the number of dividends each year. General fund companies will stipulate in the fund contract the maximum number of fund income distribution and the minimum proportion of fund income distribution each year. In the income distribution plan, the fund manager will determine the equity registration date and ex-dividend date, and the fund investors registered on the equity registration date will enjoy the right to distribute dividends; For date of record's subscription application, the share does not enjoy dividends, while for date of record's redemption application, the share still participates in dividends.

The income distribution of closed-end funds shall not be less than once a year, and the annual income distribution ratio of closed-end funds shall not be less than 90% of the realized income of funds. The dividend date of closed-end funds is also not fixed. Dividends are generally paid after the publication of the annual report, and the time is around April each year. Dividends of closed-end funds must also meet the same profit conditions as open-end funds, but dividends of closed-end funds can only be paid in cash.

Second, why does the net value of the fund "fall" after dividends?

It is only a superficial phenomenon that the net value of open-end funds will "fall" after dividends. Under normal circumstances, the net value of the reward fund will decrease accordingly, but the accumulated net value of the fund will not change.

Dividends are just one way to realize income. If the investor pays dividends in cash, it is equivalent to converting a part of the book assets into cash dividends, and the cash dividends will be returned to the investor's capital account.

If the investor's dividend method is dividend to investment, although the latest net value of the fund will decrease after dividend, the fund share held by the investor will increase dividend to investment, so it is equivalent to that the book assets of the investor have not changed.

Therefore, there is no need to worry about the temporary decline in the net value of the fund after dividends. The key depends on whether its accumulated net value grows steadily.

Third, how to choose the dividend distribution method of open-end funds?

There are two ways for investors to choose from, namely cash dividend and dividend reinvestment.

Cash dividend refers to transferring the fund dividend from the fund custody account to the bank deposit account designated by the investor on the dividend day; Dividend reinvestment means that dividends are directly reinvested in funds.

If investors do not choose the dividend method, the general default dividend method is cash dividend. Investors can also choose to reinvest dividends when purchasing funds. In the future, if it is necessary to change the dividend distribution method, investors can go through the change procedures at the outlets of this institution before the equity registration date.

Under normal circumstances, if investors are short-term investments, they can choose cash dividends; If investors intend to invest in a fund for a long time, it is more cost-effective to reinvest the dividend, and the fund company does not charge fees for reinvested dividends.