Fund dividend is to sell some assets held by the fund and then distribute cash to users. At the time of distribution, the investor's original fund share remains unchanged. Generally speaking, fund dividends are divided into cash dividends and dividend reinvestment, and users can choose according to their actual situation.
Fund cash dividend means that the fund company distributes part of the fund income to fund investors in cash. Fund dividend reinvestment refers to a dividend method that converts the cash from dividends into fund shares according to the net market value and then distributes the shares to investors.
Fund dividends must meet the following conditions: the fund must be profitable in the current year; Dividends can only be paid after the income of the current year makes up for the loss of the previous year; After dividends, the net value of the fund cannot be lower than the face value, that is, the net value cannot be lower than 1. After meeting the above three conditions, the dividend ratio of the Fund shall not be less than 90% of the net income of the Fund, and the dividend shall be paid at least once a year.
Usually, the fund manager will choose to pay dividends when the fund scale is growing, because with the continuous growth of the fund scale, it will bring greater burden to the fund manager to manage the fund at this time. At this time, it is necessary to allocate more stocks for the fund and analyze the future trend of different stocks, which will be a greater test for fund managers. In order to reduce the scale, they will choose to pay dividends.
Finally, investment funds must have relevant knowledge. Investment funds must use their own spare money instead of borrowing money to invest. Because funds generally need long-term investment, it is difficult to get more income in the short term, but the method of fixed investment can be used when investing in funds.