Dec 2 2011, 10:17 AM
QUOTE(joekaifeng @ Dec 1 2011, 09:54 PM)
i'm quite confused when someone said distribution from unit trust aren't same as dividend...
for me, both are pay out when the company makes money and after paying the price/nav will be adjusted.
or do i misunderstand anything?
The theory is same, but there is difference for investors as the nature of both investment instruments is different.for me, both are pay out when the company makes money and after paying the price/nav will be adjusted.
or do i misunderstand anything?
Both unit trust and stock price will be adjusted accordingly after distribution/dividend payout.
The difference is here:
- Stock pay dividend basically means that the company is earning profit and main shareholders willing to share the profit with small shareholders, so investors will think this is better prospect.
- Stock price may surge after dividend payout as investors are more confident. So demand is higher, pushing up the price. Stock price is affected by supply and demand.
- Unit trust fund price won't be affected by supply and demand, but only the value of the stocks hold by the fund.
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It's quite a % also.
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