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. Benchmark

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

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

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

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

    A stock index in which each stock influences the index in proportion ...
  6. Fundamentally Weighted Index

    A type of equity index in which components are chosen based on ...
Related Articles
  1. thinkstock|istock
    Mutual Funds & ETFs

    Introduction To Fundamentally Weighted Index Investing

    If you believe the market smiles on those who focus on value, growth or income, this vehicle may be for you.
  2. Mutual Funds & ETFs

    Benchmark Your Returns With Indexes

    If your portfolio is always falling short, you may not be making an apples-to-apples comparison.
  3. Fundamental Analysis

    Why Dividends Matter

    Seven words that are music to investors' ears? "The dividend check is in the mail."
  4. Investing

    How can I buy an S&P 500 fund?

    In 1976, Vanguard introduced individual investors to the first mutual fund designed to mimic the S&P 500 Index. Today it is known as the Vanguard® 500 Index Fund. Nowadays, most investment ...
  5. Chart Advisor

    A Total Stock Market ETF For Any Portfolio

    Utilizing index funds and ETFs, such as Vanguard's VTI, is one of the best ways for the average investor to track the broad markets and minimize fees.
  6. Chart Advisor

    Charts To Watch As Fed Raises Rates

    Weekly technical summary of the major U.S. indexes.
  7. Economics

    How A Limited Government Affects A Country's Finances

    Countries with limited governments have fewer laws about what individuals and businesses can and can’t do. What's the net result?
  8. Chart Advisor

    ChartAdvisor for November 7 2014

    A weekly technical summary of the major U.S. indexes.
  9. Investing

    What's the difference between legal defalcation and illegal defalcation?

    Discover what is meant by the term ''defalcation'' and how it can be used in multiple contexts to describe illegal or legal activities.
  10. Index funds, at their best, offer a low-cost way for investors to track popular stock and bond market indexes. But not all index funds are created equally.
    Investing Basics

    5 Things You Need To Know About Index Funds

    Index funds, at their best, offer a low-cost way for investors to track popular stock and bond market indexes. But not all index funds are created equally.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center