Fund dividend is a common situation in fund investment. Under normal circumstances, the fund dividend is to distribute part of the fund income to investors. There are two forms of fund dividends: cash dividends and dividend reinvestment. In most cases, cash dividends are the default. Then, after the fund pays dividends, will the cost of investors' positions be reduced? Let's get to know each other.

Will the cost of holding positions be reduced after the fund pays dividends?

After the fund pays dividends, the cost of holding positions will be reduced. The essence of fund dividend is to use fund assets to pay dividends. After the fund pays dividends, the net value of the fund unit will inevitably fall. However, because the total assets of the fund held by investors have not changed, investors have gained some cash or the number of positions has increased, which naturally means that the cost of fund positions has decreased.

In the case of cash dividends, the holding share of the fund has not changed, and a part of the fund's net value has become cash and distributed to investors, so that the fund's net value has decreased and the cost of holding positions has decreased. In the case of reinvesting fund dividends, the net value of the fund is converted into the share held by the fund, and the share is increased.

In short, after the fund pays dividends, the net value of the fund unit will decline. The decline in the net value of fund units means the reduction in the cost of holding positions. If the net value of the fund unit rises after dividends, it can bring good returns to investors.