Price return alone understates what stocks and funds actually earn. Reinvested dividends can add 1–3 percentage points a year for many indices — over decades that's a huge chunk of total wealth.
Always compare investments on total return, not price return, and preferably after fees and taxes.
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Open Decision Lab →Frequently asked questions
Is total return the same as compound annual growth rate (CAGR)?
Total return is cumulative; CAGR is the annualised equivalent. Both usually assume dividend reinvestment.
Related terms
Dividend
A cash payment a company sends to shareholders, usually quarterly, from its profits.
Expense ratio
The annual fee a fund charges, expressed as a percentage of assets.
Compound interest
Interest earned on both your original investment and the interest it has already generated.
Index fund
A fund that mirrors an index rather than trying to beat it.