After dividends, the total assets of the fund decrease, but the share remains unchanged, so the unit net value will decrease accordingly. However, this is only a sharp drop on the surface of the fund, and the total value has not changed. The rise and fall of the fund is determined by the investment target. Investment targets go up, funds go up, investment targets go down, and funds go down. It can also be said that the fund's ups and downs are affected by market conditions and have little to do with dividends.
Fund dividend means that the fund distributes part of the income to investors in cash, which is originally a part of the net value of the fund unit. According to the Interim Measures for the Administration of Securities Investment Funds, fund management companies should distribute at least 90% of the net income of funds in cash once a year. The "Interim Measures" have expired, and how to allocate them now is subject to the provisions of the Fund Contract.
Dividends are not as much as possible. 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.
There is no fixed time for fund dividends. Fund dividends need to meet certain conditions. The conditions for fund dividends are as follows:
First, the fund can only be distributed after the income of the current year makes up for the loss of the previous year;
Two, after the distribution of fund income, the unit net value can not be lower than the face value;
3. The net loss of fund investment in the current period cannot be distributed.
Only when the above three conditions are met at the same time can the fund pay dividends. Simply put, as long as the fund makes money, it can pay dividends, and the net value after dividends cannot be lower than the face value.