Dividend Units

Dividend units refer to shares or units in a mutual fund or company that regularly pays out dividends to shareholders. These units give investors the right to receive a portion of the company’s or fund’s profits, distributed as dividends. Dividend units are common in income-focused investment funds, where investors are looking for a steady stream of income in the form of regular payouts. Dividend units are typically more attractive to long-term investors seeking passive income, such as retirees, who prefer receiving periodic payments rather than capital appreciation.

Example

An investor holds dividend units in a mutual fund that distributes monthly or quarterly dividends based on the profits generated by the underlying assets.