What are the ways of fund dividends?
1 cash dividend: we can get cash dividend directly.
2. Dividend reinvestment: This is also called "dividend transfer to increase" by some sales organizations, which means that investors choose to reinvest in the form of automatically converting the distributed cash proceeds into fund shares according to the agreement on fund share subscription in the fund contract.
What are the rules for fund dividends?
1 Closed-end fund: According to the Administrative Measures for the Operation of Public Offering Securities Investment Funds, the income distribution of closed-end funds shall not be less than once a year, and the annual income distribution ratio of closed-end funds shall not be less than 90% of the annual distributable profits of the funds.
2 Open-end fund: The income distribution of open-end fund is stipulated in the fund contract. Except for special fund types specified by China Securities Regulatory Commission, cash will be given priority in income distribution of other funds. We can choose to convert the allocated cash proceeds into fund shares in advance according to the agreement on fund share subscription in the fund contract; But if the buyer makes a choice, the fund manager should pay cash.
As for the dividend distribution method of the fund, we can modify it according to our own wishes through the sales organization that originally purchased the fund, but some funds have only one dividend distribution method, which can be understood through the fund contract. Moreover, fund dividends will lead to a decline in the net value of fund shares, but it has no practical impact on the interests of investors.