Does the S&P 500 include dividends?

The commonly quoted S&P 500 level is a price index and does not include dividends. A separate total return version of the index adds reinvested dividends, and over long periods it grows dramatically faster than the quoted level suggests.

What is the difference between total return and price return?

Price return measures only the change in price. Total return adds the dividends or distributions paid, assuming they were reinvested. For judging what an investment actually earned, total return is the honest measure.

Which should I use to compare my portfolio to a benchmark?

Total return on both sides. Your account value already includes dividends, so comparing it to a price-only index level rigs the test in your favor. Use a total return index series or an investable index fund's performance as the benchmark.

Why does my fund's return differ from the index it tracks?

Usually some mix of convention (price vs. total return), the fund's fee, and small tracking differences. Compare the fund's total return to the index's total return over the same dates before assuming something is wrong.

Total Return vs. Price Return: Why the Index Chart Understates Reality

6 min read · Updated 2026-09-06

When the news says "the S&P 500 rose 20 points," it is quoting a price index: a number that tracks share prices and completely ignores the dividends those companies paid. The version that includes dividends, the total return index, is a different and larger number that most headlines never mention.

That distinction sounds like trivia until you compare things: your portfolio against a benchmark, one fund against another, or a claim like "the market went nowhere for a decade." Use the wrong convention on one side and the comparison is quietly rigged. This guide explains what each measure includes, how big the gap gets, and how to keep your comparisons honest.

Backtest on total-return data →

Two ways to measure the same market

A price return index answers: what happened to share prices? A total return index answers: what happened to an investor's money, assuming every dividend was reinvested the day it was paid? Same companies, same period, two different numbers.

Neither is wrong; they measure different things. But almost every quoted index level (the S&P 500 at 6,000, the FTSE at 8,000) is the price version, while what you actually earn from holding a fund is closer to the total return version. Your personal result is a third thing again: it also depends on when you added or withdrew money and what fees you paid.

What each measure includes
Measure	Price moves	Dividends	Your deposits and fees
Price return (the quoted index)	Yes	No	No
Total return	Yes	Yes, reinvested	No
Your personal return	Yes	Yes, as received	Yes

Comparisons only work when both sides use the same measure.

How big the gap compounds

In any single year the difference is roughly the dividend yield: a couple of percentage points for a broad index. Compounded over decades, that small annual wedge grows into a chasm, because reinvested dividends buy shares that then earn their own price growth and dividends.

As a hypothetical: a market gaining 5% a year in price terms while yielding about 2% turns $10,000 into roughly $43,000 over 30 years on a price-only chart, but into roughly $81,000 with dividends reinvested. The price chart is not slightly off; it misses close to half the outcome.

Growth of $10k: price only vs. total return (hypothetical)

Price return (~5%/yr)Total return (~7%/yr)

Hypothetical 5% price growth plus a 2% reinvested yield, before fees and taxes. Run real tickers and dates in the tools for actual numbers.

Where the mismatch bites

Mixed conventions produce conclusions that feel rigorous and are simply wrong. The classic cases:

•"The market went nowhere for a decade." On a price chart, some famous stretches (like 2000 to 2009 for US large caps) look dead flat or negative; with dividends reinvested the same stretch looks meaningfully less bleak. Still poor, but a different story.
•Judging your portfolio against a quoted index level: your account statement includes dividends, the index quote does not, so the comparison flatters you. Benchmark against a total return series or an investable fund instead.
•Comparing a dividend-heavy fund to a growth-heavy fund on a price chart: the dividend payer looks artificially weak because a large share of its return is paid out rather than shown in the price line.
•Backtests or articles that switch conventions mid-argument: a strategy tested on total return data compared against a price-only benchmark will look brilliant for free.

How to tell which number you are looking at

Fund fact sheets and regulatory performance figures are generally total return: they state "with distributions reinvested." A broker's price chart of a ticker, a quote page's percent change, and the headline index level are price return. Some indexes publish both versions separately, with the total return variant labeled TR or with "total return" in the name.

When a chart or claim does not say which convention it uses, assume price return and treat any conclusion drawn from it with suspicion until you can check the total return version of the same period.

Run any claim on total-return data

Every backtest and comparison on this site uses dividend-reinvested total return, so both sides of any comparison are on the same honest footing. The fastest way to internalize the gap is to test a famous claim: backtest a broad index fund across a "lost decade" and compare what the price chart implied with what an investor actually experienced, then put a dividend payer and a growth fund head to head over the same years.

One further step matters for long horizons: even total return overstates purchasing power until you adjust for inflation, which is its own topic. Measure in total return first; adjust for inflation when the question is what the money could buy.

Try it yourself

Backtest PortfolioEvery backtest here uses dividend-reinvested total return on real data.Open tool →Growth ReplayWatch price growth and dividends accumulate as separate lines over time.Open tool →VOO vs VTIA head-to-head comparison computed on total return, the same convention both sides.Open tool →

FAQ

Does the S&P 500 include dividends?: The commonly quoted S&P 500 level is a price index and does not include dividends. A separate total return version of the index adds reinvested dividends, and over long periods it grows dramatically faster than the quoted level suggests.
What is the difference between total return and price return?: Price return measures only the change in price. Total return adds the dividends or distributions paid, assuming they were reinvested. For judging what an investment actually earned, total return is the honest measure.
Which should I use to compare my portfolio to a benchmark?: Total return on both sides. Your account value already includes dividends, so comparing it to a price-only index level rigs the test in your favor. Use a total return index series or an investable index fund's performance as the benchmark.
Why does my fund's return differ from the index it tracks?: Usually some mix of convention (price vs. total return), the fund's fee, and small tracking differences. Compare the fund's total return to the index's total return over the same dates before assuming something is wrong.

Key terms in this guide

Plain-English definitions in the Learning Hub.

Total return →CAGR (Compound Annual Growth Rate) →Dividend yield →Tracking error →Benchmark correlation →

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