The significance of fund dividend is related to the fund dividend system. In the past, fund dividends were paid in accordance with the provisions of the Interim Measures for the Administration of Securities Investment Funds, but now how to distribute them is in accordance with the provisions of the fund contract.

Because in fund investment, in order to avoid risks and increase the liquidity of funds, fund companies will stipulate dividend conditions in fund contracts. Once the fund meets the conditions of fund income distribution stipulated in the contract, the fund must pay dividends.

Fund dividends have two meanings. One is to use fund dividends to reduce fund assets when the fund market falls, so as to keep the income safe and avoid the return of fund holders when the fund retreats.

Another reason is the liquidity of the fund. Some fund holders buy and sell frequently, and some investors don't sell anyway. Both of these investors exist, so fund dividends are also a liquidity option for investors. In addition, there are some closed-end funds with poor liquidity, so fund dividends allow investors to cash in their gains.