Fund dividend means that the fund distributes part of the income to investors in the form of cash or converted into fund shares (that is, dividend reinvestment). The income of the fund is reflected in the net value of the fund, and the dividend money is actually part of the net value of the fund.
Fund dividends can be divided into two ways: cash dividends and dividend reinvestment. Cash dividend means that the fund company distributes part of the fund income to fund investors in cash, and dividend reinvestment means that the cash obtained from dividend is converted into fund shares according to the net fund value and distributed to investors.
When the fund pays dividends in cash, the cash generated from the dividends will return to the investor's bank card, which is equivalent to reducing the investment principal, thus making investors intuitively think that the principal in their fund account has decreased.
For example, if an investor buys 10000 shares of a fund, when the net value of the fund is 2 yuan, the fund will pay dividends in cash, and every 100 shares will be distributed 1 yuan, then the dividend cash that the investor can get is: 1000 yuan, which will be directly transferred to the investor's bank card. In 9 yuan, the market value of the fund became 19000 yuan, which was 1000 yuan lower than the 20000 yuan before dividends.
Is fund dividend a good thing or a bad thing?
Fund dividend is a neutral event, which is neither a good thing nor a bad thing, or it is taken out of the left pocket and put into the right pocket, which cannot constitute an investment decision. For investors, the most important thing for investment funds is the actual income realized by the fund, not the amount of dividends.
Fund dividend is a neutral event, which is neither a good thing nor a bad thing, or it is taken out of the left pocket and put into the right pocket, which cannot constitute an investment decision. Directly enter the net value without dividends. When you redeem it, it is still your money. Dividend, but it is equivalent to giving it to you in advance. No dividends, 20,000 at the time of redemption; Dividend is equivalent to giving you 2000 yuan in advance, and only1.8000 yuan at the time of redemption (not accurate, just for the convenience of understanding).
For investors, the most important thing for investment funds is the actual income realized by the fund, not the amount of dividends. Although the funds with more dividends get more cash, the net asset value of the fund units they hold also decreases. And the fund with less dividends, although less money is distributed, the net asset value of the fund has increased, and the result is actually the same.
If investors need money, they can redeem some fund shares and pay dividends to themselves. Of course, there is a redemption fee for fund redemption, but there is no redemption fee for dividends, but dividends are a small part after all (for example, dividends are 2%, only 5/1000 of 2%) and need not be considered.
In fact, the fund dividend is the feeling that the fund company's income to customers is safe, and it is also a means for the fund company to attract customers' attention, so investors don't have to pursue it deliberately. Dividends are not conducive to the stable management of funds, and often change the position structure to deal with dividends to customers, which will have a negative impact on the return on investment in a better stock market environment.
Some people think that it is good to reduce the net value after dividends and increase the fund share. In fact, those are superficial phenomena and have no effect on real income.