Q. What is the total return of a fund?
A. For a mutual fund, total return assumes reinvestment of all dividends and capital gains, it also reflect ongoing expenses but not sales charges.
Why total return is important? This is because for the broad market indexes such as S&P 500, over a long period of time, dividends account for a significant portion of its returns, if you don't consider the reinvestment of these dividends, the index's return will be significantly under-calculated over a long period of time.
A. For a mutual fund, total return assumes reinvestment of all dividends and capital gains, it also reflect ongoing expenses but not sales charges.
Why total return is important? This is because for the broad market indexes such as S&P 500, over a long period of time, dividends account for a significant portion of its returns, if you don't consider the reinvestment of these dividends, the index's return will be significantly under-calculated over a long period of time.
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