Rate of return: includes or does not include dividends

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helloeveryone
Posts: 204
Joined: Sun Sep 04, 2016 5:16 pm

Rate of return: includes or does not include dividends

Post by helloeveryone » Sun Oct 28, 2018 10:01 pm

We use fidelity for our retirements accounts.
It seems that rate of return is calculated without including dividends & interests.

Could someone explain that? It ultimately doesn't matter since asset allocation is what matters and annual or biannual readjustment is what's important but I was just curious why they are not included.

Thank you

jbranx
Posts: 264
Joined: Thu Feb 09, 2017 6:57 pm

Re: Rate of return: includes or does not include dividends

Post by jbranx » Sun Oct 28, 2018 10:22 pm

Not sure which section of Fidelity you are referring to, but the returns they post under the "performance" tab are time/dollar weighted and do include dividends. Thus, the calculation adjusts for any monies added during the period, including reinvested dividends. It's like the XIRR formula in Excel or the formulas advisers use in Advent software. Fido does the "performance" tab update a few days after the end of the month. If you are referring to the returns shown on their enhanced quote/research tab, that data is from outside vendors typically and may not include total returns.

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