Will the reinvestment of fund dividends increase the principal?
No, the reinvestment of fund dividends will only increase the share held by the fund, but will not increase the principal of the fund, because the net value of the fund will decrease after the fund dividends. In fact, the fund dividend is to distribute the net profit of the fund to investors in cash, so the total amount held by the fund has not changed. However, after the dividend of the fund is reinvested, investors will get more income when the fund rises in the later period.
It should be noted that it takes a long time, usually 4-7 working days, for the fund share to arrive after the fund chooses dividend reinvestment. When dividends arrive, investors can pay attention to their share of fund transactions, and the system will also notify them after dividends arrive.
Is there a handling fee for fund dividend reinvestment?
No, there is no need to charge any handling fee for reinvesting fund dividends into shares, because fund dividend reinvestment is to convert the same value bonus funds obtained from fund dividends into fund shares, which increases the original fund shares. For fund management companies, there is no actual cash outflow and inflow for dividend reinvestment, so there is no subscription fee for fund dividend reinvestment.
In fact, there is no change in fund dividends. The only change is that the net value of the fund has become lower, which is also a good thing for investors. Because the net value of the fund has decreased, the high net value of the fund may become a medium position, and investors who are afraid of the high net value of the fund will be more at ease. Simply put, fund dividends can also reduce fund investment risks and investment costs to a certain extent.