1. cash dividend: the fund manager distributes part of the fund income to investors in cash. Investors can get cash dividends directly, and usually do not need to pay redemption fees. After the cash dividend, the number of fund shares held by investors remains unchanged, but the net value of the fund may decrease, because some fund shares are exchanged for cash.
2. Dividend reinvestment: When the fund pays dividends in cash, investors choose to use the cash obtained from dividends and purchase the fund according to the net value of the fund unit on the day of dividends, thus increasing the original fund share. This way can avoid the subscription fee for reinvestment. If the net value of the fund rises subsequently, the increased share may bring more income. After the dividend is reinvested, the number of fund shares held by investors will increase, and they will enjoy or bear the gains or losses caused by the subsequent changes in the net value of fund shares.