The so-called dividend is that the fund distributes all or part of the net income to investors after realizing the net income from investment. Net income of the fund, dividend income refers to the balance of the fund income after deducting the expenses that can be deducted from the fund income according to relevant regulations, which mainly comes from dividends, bonuses, bond interest, price difference between buying and selling securities, bank deposit interest, etc.
Dividends are the income of the year, which are allocated to shareholders after the statutory provident fund, public welfare fund and other items are extracted according to regulations. Income belonging to shareholders. Under normal circumstances, shareholders will reinvest in the company after receiving dividends to achieve the effect of compound interest. Ordinary shares can enjoy dividends, and preferred shares generally do not enjoy dividends. Equity companies can only distribute profits if they get profits.
Conditions for fund dividends:
First of all, the fund's income in the current year can only be distributed after making up for the losses in previous years; Secondly, after the distribution of fund income, the unit net value cannot be lower than the face value; Thirdly, if the fund investment has a net loss in the current period, it cannot be distributed. Finally, in addition to meeting the requirements of relevant laws and regulations, fund dividends should also be carried out in accordance with the income distribution clauses in the prospectus.
There are two ways of fund dividend: cash dividend and dividend reinvestment. According to the Measures for the Administration of the Operation of Securities Investment Funds, if the investor does not specify the dividend distribution method, the default income distribution method is cash dividend.