Dividend:

Dividend refers to the distribution of a portion of a company’s or fund’s profits to investors in proportion. For a company, dividend is the return on shareholders’ investment; for a fund, it is the distribution of investment income.

The forms of dividend include cash dividend and stock dividend (or reinvestment of fund shares). Cash dividend directly pays the profit to investors in cash, while stock dividend or reinvestment of fund shares converts the profit into new shares or fund shares.

A company or fund can only distribute dividends when it is profitable. If a company or fund incurs a loss, it cannot distribute dividends.

After dividend distribution, the net value of the company or fund cannot fall below a certain standard (such as the net value of a fund cannot be lower than 1 yuan) to ensure that investors’ rights and interests are not harmed.

For investors: Dividend is a way to obtain investment income, especially cash dividend can directly increase investors’ cash income. In addition, dividends may enjoy tax benefits and be regarded as a positive signal of the company or fund’s future performance.

For a company or fund: Dividend can enhance investor satisfaction, strengthen investors’ trust in the company, and also help control the fund size and optimize the investment portfolio.

Dividend policies are usually clearly stipulated in the company’s or fund’s contract, including the conditions, frequency and proportion of dividend distribution.

Market environment, laws and regulations, as well as the performance of the company or fund, also affect dividend decisions. For example, in a favorable market environment, a company or fund may increase the dividend payout.