There are two ways, one is cash dividend, and the other is dividend reinvestment. Cash dividend, very simple, is to send cash directly to your account. Dividend reinvestment can be understood as dividends, similar to continuing to invest in funds, continuing to roll and expanding the scale of investment. Compared with cash dividends, the advantage of dividend reinvestment is that fund management companies generally do not charge subscription fees to encourage investors to continue investing in funds.

There is no standard answer to which one earns more. If the market continues to improve, of course, dividends will be reinvested more, because dividends will also be converted into fund shares, which can participate in value-added and obtain excess returns. On the other hand, if the market falls and cash is king, the more losses the fund shares hold. So at least the cash dividend has been collected, avoiding market fluctuations. Generally speaking, the fund dividend model can be modified. Generally speaking, investors who invest in growth funds have strong anti-risk ability and pay attention to the growth and accumulation of capital, which is more suitable for choosing the distribution method of dividend reinvestment; Investors who invest in balanced funds and income funds pay more attention to stability and cash income.

You can choose the distribution method of cash dividends. Fund dividend reinvestment means that fund holders directly use the cash from dividends to buy funds, that is, they convert the cash from dividends into fund shares and continue to invest in funds (that is, equivalent to additional investment). For fund managers, there is no cash outflow from dividend reinvestment, so dividend reinvestment usually does not charge subscription fees. Frankly speaking, dividend reinvestment is an increase in the position of fund companies that are exempt from subscription fees. Advantages and disadvantages of these two dividend methods Advantages of cash dividend: direct payment and safe cash dividend Disadvantages: The fund share remains unchanged, but the net value will decrease. Advantages of dividend reinvestment: increasing fund share; Disadvantages of dividend reinvestment: decline in net worth.

We can't unilaterally say which of these two dividend ways is better, but also combine ourselves. If you feel the next market downturn through your own investment experience, or want to receive the surprise of investment income inadvertently, you can choose the way of cash dividend; If you want to make a long-term investment, feel that there is no better investment for the dividend money, or feel that the next market is good according to your own investment experience, you can choose the dividend reinvestment method. Although the net value decreased, the shareholding share increased. If the net value rises, the price difference will be higher. It should be noted that when buying a fund, the default dividend method is cash dividend. Apart from the Monetary Fund, the Monetary Fund only invests in dividends.