The friend that buys fund knows, open-ended fund every time can undertake dividend, if encounter fund bonus, how should we do?
Let's first look at the circumstances in which the fund will pay dividends.
First, the income of the fund in the current year can make up for the losses of previous years before dividends can be carried out;
Second, after the fund dividends, the unit net value of the fund should not be lower than the face value;
Third, if the current net loss of the fund, it can not carry out dividends.
Fund dividends must meet the above three conditions at the same time before dividends can be distributed. Generally speaking, a normal dividend can indicate that the fund is in good condition.
When encountering fund dividends, we can choose two ways of dividend distribution. The first is dividend reinvestment, that is, for dividend funds, they will automatically purchase this fund; the second is cash dividend, which is to cash out the dividend funds and put them into safe bags.
A lot of people think that dividend sounds like a good thing, like picking up a big bargain. In fact, the fund dividend is not as good as you think, because the dividend money is not given to you by the fund company, but you give it to yourself. The fund dividend is the fund that reaches the dividend condition. Part of the total investment of the fund is converted into cash and distributed to this fund The original holder, after the dividend, the net value of the fund will decrease. The amount of the decrease is the amount of the dividend distributed to you. The more the bonus points are, the more the net value decreases. Therefore, for investors, the total amount of the fund you hold, that is, your assets, does not change before and after the dividend.
Let's go back to the option of dividends.
Dividend reinvestment is to increase the share of the original fund and keep rolling. For the part of dividend reinvestment, the subscription fee is no longer charged. If you are optimistic about this fund, you should choose the dividend reinvestment method. The cash dividend you choose is basically equivalent to manually redeeming part of the fund. If you need to make strategic adjustment to collect cash, you can choose the way of cash dividend.
Many people like to choose the cash dividend method as investment inside the bag for safety, especially when the market is fluctuating, withdrawing when the market is falling, and entering again when the market is expected to rise. Isn't this band operation? The risk of band operation is not much to say, which is contrary to the concept of long-term return of fund investment. What's more, it's time for you to achieve your investment goal and withdraw from the market. As long as you withdraw and then enter the market, your risk is back.
Dividend method is not when the fund is facing dividend, but when you start to apply for this fund, you can pay attention to it when you buy the fund confirmation information. According to your own needs, the fund company generally encourages investors to continue to invest, so the default dividend method is dividend reinvestment, and allows investors at any time Change the dividend method.
Dividend in the fund investment is not a particularly critical issue, for long-term investors, dividend reinvestment is undoubtedly a better choice.