Increased investor flows, capital appreciation and reinvested dividends
will increase the asset value of a fund.
The index is reported daily as a total return index, which means that the value of reinvested dividends
is included in the calculation.
Additionally, Adams Natural Resources' total return on net asset value, with reinvested dividends
and capital gains was -3.
9 per cent (without the transitional arrangements), after factoring in the reinvested dividends
under the most recent round of its dividend reinvestment plan.
4 per cent when reinvested dividends
are taken into account.
The next year, dividends are paid on the original capital plus the reinvested dividends
from earlier years.
Just how important are reinvested dividends
to wealth accumulation, as compared to capital gains (the increase in stock prices)?
If you had reinvested dividends
to promote compounding and dollar cost averaging, the value would have increased to more than $9.
Before last week, the stock had gained 17% this year including reinvested dividends
, compared with a 7% return in the Bloomberg Europe Pharmaceutical Index.
have made a significant contribution to total return over the past 80 years.
An investor using a total return index sees a more accurate indication of an index's actual investment return: price change plus reinvested dividends