As an investment manager, the fund must consider for itself. So what should the fund consider? It is the main source of fund income-management fee. As long as the funds managed by the fund continue to expand, more and more management fees can be collected, and the profits of the fund company will be more. Once the fund pays dividends, it will inevitably lead to the decline of management scale, which in turn will lead to the reduction of management fees. Therefore, in order to avoid dividends, as early as 2007, some fund companies left their funds below the face value through large-scale splitting, so as to reasonably avoid fund dividends, maintain a certain fund scale and obtain corresponding management fees.
On the surface, dividends do lead to a direct reduction in the management fee income of fund companies, which is unfavorable. However, let's take a long view. When the fund's stable dividends cultivate its own investor group, the dividends in the bull market reduce the income from management fees, but make investors get cash dividends. When the market is at a low level, these investors will reinvest the previous dividend cash, thus increasing the income of the fund company in the bear market, making the income gap between the fund company in the bull market and the bear market less obvious and increasing the stability of the company's performance. If the fund company doesn't pay dividends, investors will redeem the fund shares one after another in the bear market, which will accelerate the reduction of the management fee income of the fund company in the bear market and easily affect the performance stability of the fund company itself.
Moreover, because dividends will inevitably increase stock turnover, fund managers will operate passively. Therefore, from the perspective of fund managers, most of them don't like dividends, especially a large proportion of dividends. However, according to statistics, the average turnover rate of equity funds in 2008 exceeded 120%. The capital turnover is actually not low. If the fund manager can arrange the operation strategy, control the operation position and prepare the dividend in advance, then the dividend will not become so reluctant and passive. If dividends can be paid regularly, investors' sense of belonging will be enhanced.
At present, no fund can pay dividends stably. If a fund can take the lead in doing this, it will inevitably attract the attention of the market. By stabilizing dividends, we can enhance the centripetal force and stability of investors and cultivate their long-term investment style, thus laying a good social foundation for the stable growth of fund management fees.