What are the forms of fund return?

When investing in funds, return is one of the most important indicators for investors. There are many forms of fund returns, including dividend income, capital appreciation and profit distribution. In this article, we will introduce these forms of return in detail and explain their meanings.

Dividend income refers to the dividend or interest income paid to investors in stocks or bonds held by funds. Dividend income is usually presented in the form of annual percentage, and investors can see the corresponding terms in the fund contract. Dividend income is usually paid in cash, but some foundations reinvest dividends to buy more fund shares.

In addition to dividend income, the fund's return also includes capital appreciation. Capital appreciation refers to the profit brought by the increase in the net value of fund shares. The net value of fund share is the value of each fund share calculated by the fund company. The net value of the fund will change at any time because it depends on the fluctuation of the net asset value. If the net value of a fund is 10 yuan at the time of purchase and 15 yuan at the time of sale, then investors can get the capital appreciation income of 5 yuan.

Profit distribution refers to the behavior of fund companies to distribute profits to fund holders according to their investment income (after deducting management fees and other expenses) and the distribution method agreed in the contract. The profit distribution can be distributed separately according to the fund share holdings, and can also be reinvested in the fund.

In addition, unlike dividend income, capital appreciation and profit distribution, some funds also provide tax incentives in the form of returns. These funds are called tax deferred funds or leveraged funds. Investors gain capital appreciation through the investment of these funds, and these capital appreciation will not be taxed temporarily. Only when investors sell their fund shares, or when the fund expires, do they need to pay taxes.

Generally speaking, fund income is a key indicator for investors to realize income, and it is also an important factor to determine the investment value of funds. Understanding the meaning of fund return forms and how to maximize fund return can help investors make more informed investment decisions.