DEFINITION of 'Value Added Monthly Index - VAMI'

An index that tracks the monthly performance of a hypothetical $1000 investment.

The calculation for the current month's VAMI is:
= Previous VAMI x (1 + Current Rate of Return)

BREAKING DOWN 'Value Added Monthly Index - VAMI'

The value-added monthly index charts the total return gained by an investor from reinvestment of any dividends and additional interest gained through compounding. The VAMI index is sometimes used to evaluate the performance of a fund manager.

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RELATED FAQS
  1. What is the Value Added Monthly Index (VAMI) and how is it used?

    Find out about the value added monthly index, or VAMI, including how it is computed and how investors can interpret different ... Read Answer >>
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    Understand what tracking error is and learn about the significant difference it can represent for investors who favor index ... Read Answer >>
  3. Is it possible to invest in an index?

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