Author Topic: Do "Hypothetical growth of $" charts include dividend reinvestment?  (Read 5377 times)

cheapass

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For example, this fund would have turned $10K into $17K during the last 10 years. Does this assume dividend reinvestment or no?

https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0122

MustacheAndaHalf

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Re: Do "Hypothetical growth of $" charts include dividend reinvestment?
« Reply #1 on: February 10, 2016, 08:38:30 PM »
Take a look at the "performance" tab, where it shows returns based on taxes.  The first two rows of percentages are called: "Returns before taxes", "Returns after taxes on distributions".  Since taxes refers to distributions, the first row includes distributions.  That row shows 5.38%/year total return.  Taking (1.0538) to the 10th power gives 1.689x, so $10,000 grows into $16,890.  Sounds like the $17k figure does include reinvested distributions - but ignores the tax implications.

Most funds ignore tax implications - Vanguard started this trend to show the tax impact of funds, and to me it's useful additional information.



TheAnonOne

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Re: Do "Hypothetical growth of $" charts include dividend reinvestment?
« Reply #2 on: February 11, 2016, 11:42:08 AM »
For example, this fund would have turned $10K into $17K during the last 10 years. Does this assume dividend reinvestment or no?

https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0122

Almost all charts on the internet do NOT include dividends. Though, I think the vanguard one assumes re-investment...

An interesting thought experiment though. The 2% that VTSAX returns in dividends, is usually above and beyond what is in the charts. This is pretty cool!

mizzourah2006

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Re: Do "Hypothetical growth of $" charts include dividend reinvestment?
« Reply #3 on: February 11, 2016, 12:48:53 PM »
For example, this fund would have turned $10K into $17K during the last 10 years. Does this assume dividend reinvestment or no?

https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0122

Almost all charts on the internet do NOT include dividends. Though, I think the vanguard one assumes re-investment...

An interesting thought experiment though. The 2% that VTSAX returns in dividends, is usually above and beyond what is in the charts. This is pretty cool!

This is what I have noticed too. If you want to look at actual returns you can use yahoo finance adjusted close prices.

https://finance.yahoo.com/q/hp?s=VASGX+Historical+Prices


So the VASGX adjusted close on Jan. 4th, 2006 was $16.48. The adjusted close on Jan. 4th, 2016 was 26.90, which is a return of 63.23%.



MDM

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Re: Do "Hypothetical growth of $" charts include dividend reinvestment?
« Reply #4 on: February 11, 2016, 07:19:50 PM »
See also https://www.bogleheads.org/forum/viewtopic.php?t=81248 and https://www.bogleheads.org/forum/viewtopic.php?t=118683.  In short, use Morningstar - see the links for more details.

A reason for charts not to include the effect of taxes is that the tax rate can vary significantly by individual.