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Dividends reflected in performance #s?

edited June 2011 in Fund Discussions
Checking Vanguard Wellesley Income Fund (VWINX) performance YTD is up 5.1% YTD thru June 21. So I'm curious (re this fund and others) do the YTD, or 3-year, 5-year, etc. percentage gain performance percentages include dividends reinvested? Since dividends could make a big difference in a fund's performance, and if dividend gains are not included in the performance percentage, how does one factor that in? If dividends are included, my question is moot.


  • The Morningstar Mutual Fund performance numbers are total return (i.e. including dividends and other distributions)
  • Reinvested fund distributions (dividends, gains etc) are included in mutual fund total return performance calculations.
  • To take a real-world example (if I don’t screw it up):

    American’s Capital Income Builder (CAIBX) began the year at $49.91 per share. On March 16 it paid a dividend of $0.46 per share. On May 31, the last date for which Morningstar reports, it closed at $52.96 per share.

    So the total gain (52.96 minus 49.91, plus 0.46) is $3.51. And 3.51 divided by 49.91 gives a percentage gain as of May 31 of 7.03%. Morningstar reports a gain of 7.09% for May 31. Not quite sure where the extra bit comes from, but I’ll take it.
  • Thanks my friends for clearing this up for me. --Skipper
  • You forgot the gain on the dividend. On March 18th, that dividend was reinvested at a price of $49.63. Thus it bought $0.46/$49.63 = 0.009269 shares.

    The end value is thus 1.009269sh * $52.96 = $53.45 (the fractional share also went up in value)
    The gain is thus $3.54
    $3.54/$49.91 = 7.09%
  • Thanks for this Investor...I have often made the mistake of using Yahoo Finance's charting tool for comparison of funds. This is important to remember when comparing funds using chart comparison tools. Morningstar is the better choice. Yahoo Finance's charting tool does not reflect the reinvestment of dividends and distributions.
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