Total return

Total return measures what an investment produced once its dividends are counted and treated as reinvested. Price return measures only the movement of the quoted price and ignores every payment made along the way. Index providers publish both versions of the same index, which is why the same index can be quoted with two different figures for the same year.

Why it matters

The distinction decides whether a comparison is honest. Your own portfolio keeps its dividends, whether you spend them, leave them in cash or buy more shares with them, so measuring it against a price-only index gives you a head start of roughly the index's dividend yield every year. Over one year that gap is small enough to ignore; over a decade it is large enough to turn a portfolio that trailed the market into one that appears to have beaten it. Published index figures normally carry a label such as price index or net total return, which is where you can check which of the two a quoted number came from.

How BullBenchmark shows it

The index lines we draw next to your return are the total-return versions, so dividends are counted on both sides of the comparison. Your own dividends enter the same way, from the payments recorded in your broker statements rather than from an assumed yield. The comparison as we build it is running on the live demo.

Related terms

Benchmark · Dividend · S&P 500

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