Value Added Monthly Index - VAMI

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.

RELATED TERMS
  1. K-Ratio

    A ratio that is used in the performance evaluation of an equity ...
  2. Total Return Index

    A type of equity index that tracks both the capital gains of ...
  3. Index Investing

    A form of passive investing that aims to generate the same rate ...
  4. Indexing

    1. The adjustment of the weights of assets in an investment portfolio ...
  5. Enhanced Index Fund - EIF

    A mutual fund that tracks a stock market index, but with certain ...
  6. Index Fund

    An index fund is a type of mutual fund with a portfolio constructed ...
Related Articles
  1. Professionals

    Average Market Returns

    We look at the major indexes and their average yearly returns.
  2. Mutual Funds & ETFs

    ETF Tracking Errors: Protect Your Returns

    Tracking errors tend to be small, but they can still adversely affect your returns. Learn how to protect against them.
  3. Investing Basics

    What is an Index?

    An index is a statistical means of calculating a change in an economy or market.
  4. Investing Basics

    The Pros and Cons of Indexes

    Learn about the advantages and disadvantages of stock indexes and passive index funds. Discover how there is an opportunity cost to using index funds.
  5. Fundamental Analysis

    Calculating Future Value

    Future value is the value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today.
  6. Personal Finance

    Dissecting the Simple Interest Formula

    Simple interest ignores the effect of compounding: it's only calculated on the principal amount. This makes it easier to calculate than compound interest.
  7. Stock Analysis

    3 Index Funds with the Lowest Expense Ratios

    Read detailed information about index mutual funds with some of the lowest expense ratios in their categories, and learn about their pros and cons.
  8. Investing Basics

    Investing $100 a Month in Stocks for 20 Years

    Learn how a monthly investment of just $100 can help build a future nest egg using properly diversified stocks or stock mutual funds.
  9. Mutual Funds & ETFs

    Measuring Performance

    Measuring Performance
  10. Mutual Funds & ETFs

    Reinvesting Your Mutual Fund Dividends

    Learn the benefits of reinvesting your mutual fund dividends, their impact over time, and when it is better to take the dividend payments as cash.
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 >>
  2. How can I calculate the tracking error of an ETF or indexed mutual fund?

    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?

    First, let's review the definition of an index. An index is essentially an imaginary portfolio of securities representing ... Read Answer >>
  4. How does a point change in a major index effect its equivalent exchange-traded fund?

    The S&P 500 and Dow Jones Industrial Index (DJIA) are two of the most well-known indexes tracking the movement of the ... Read Answer >>
  5. What formula can I use to calculate interest on interest?

    Find out more about compounding interest, what it measures and how to calculate the amount of compound interest accrued using ... Read Answer >>
  6. How do you calculate the excess return of an ETF or indexed mutual fund?

    Read about how to calculate and interpret the expected return generated by an exchange-traded fund (ETF) and an indexed mutual ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center