Dividend reinvestment
Directing payments received into buying the same or other securities instead of withdrawing the cash.
How to read the number
It converts a stream of payments into a growing position; the distance between a price index and a total return index measures exactly this decision.
When the metric lies
What is reinvested is the amount after tax and commission, so a calculation built on declared payments overstates the result systematically.
Also known as: dividend reinvestment