Performance-Based Index

AAA

DEFINITION of 'Performance-Based Index'

A stock index that includes all dividends and other cash events paid out to shareholders. When measuring the performance over a given time period, the performance-based index will add in any dividend amounts to the net share price before calculating the index return.

INVESTOPEDIA EXPLAINS 'Performance-Based Index'

The DAX, a benchmark stock index of 30 blue chip German companies, is a performance-based index, as are many of those based on European equities. The performance of the benchmark Standard & Poor's 500 Index is usually presented with company dividends included, but can be shown with and without. When examining the total return of index funds, investors may see that not only are dividends included, but also capital gains, a factor not present in the non-traded indexes themselves.

RELATED TERMS
  1. Fundamentally Weighted Index

    A type of equity index in which components are chosen based on ...
  2. Benchmark

    A standard against which the performance of a security, mutual ...
  3. Standard & Poor's 500 Index - S&P ...

    An index of 500 stocks chosen for market size, liquidity and ...
  4. Total Return

    When measuring performance, the actual rate of return of an investment ...
  5. Market Index

    An aggregate value produced by combining several stocks or other ...
  6. Price-Weighted Index

    A stock index in which each stock influences the index in proportion ...
Related Articles
  1. Introduction To Fundamentally Weighted ...
    Mutual Funds & ETFs

    Introduction To Fundamentally Weighted ...

  2. Benchmark Your Returns With Indexes
    Mutual Funds & ETFs

    Benchmark Your Returns With Indexes

  3. Why Dividends Matter
    Fundamental Analysis

    Why Dividends Matter

  4. How can I buy an S&P 500 fund?
    Investing

    How can I buy an S&P 500 fund?

comments powered by Disqus
Hot Definitions
  1. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  2. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  5. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  6. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
Trading Center