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 ...

  2. Mutual Funds & ETFs

    Benchmark Your Returns With Indexes

  3. Fundamental Analysis

    Why Dividends Matter

  4. Investing

    How can I buy an S&P 500 fund?

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center