Fund dividend is not the biggest standard to measure fund performance. The biggest criterion to measure the fund's performance is the growth of the fund's net value, and dividends are just the cash for the growth of the fund's net value. Dividends are not as much as possible. Investors should choose a dividend distribution method that suits their own needs.
For open-end funds, if investors want to realize income, they can also redeem part of the fund shares to achieve the effect of cash dividends; Therefore, whether the fund pays dividends and the number of dividends will not have a significant impact on investors' investment income.
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The purpose of fund dividends
1, reduce the unit net value. The purpose is to make this fund look "cheaper", because for many ordinary investors who don't know the truth, they often buy funds based on net worth.
2. Marketing gimmick. Because funds have to make money to pay dividends, and "dividends" sounds good, fund companies will also tell investors that the company's performance is not bad through regular dividends. Of course, if fund companies use "dividend" propaganda too much, they will also incur penalties from the regulatory authorities, because "dividend" is a neutral event for investors.
3. Adjust the investment strategy. Because dividends will turn some of the proceeds into cash and distribute them to investors, this action is equivalent to letting investors redeem some funds, and at the same time letting fund managers lighten their positions without violating the regulations. Especially at the high point of the bull market, fund managers reduce their positions through dividends and help investors save their pockets to minimize the losses caused by the stock market crash.
Baidu Encyclopedia-Fund Dividends