Price Return vs Total Return.
In plain English
Price return and total return are two ways to measure how an investment did, and the gap between them is the cash the investment paid you. Price return looks only at whether the price went up or down. Total return adds any dividends, interest, or distributions, and usually assumes you reinvested them. For dividend stocks and bonds, the two numbers can differ a lot over the years, which is why a chart showing price alone can make a steady payer look worse than it really was.
01Why it matters
Charts and headlines often show price return, so comparing investments on price alone can quietly mislead you about which one actually built more wealth.
02The math, step by step
Two funds both start and end the year at $100, so both have a 0 percent price return. But Fund A paid $4 in dividends and Fund B paid nothing. Fund A's total return is 4 percent; Fund B's is 0 percent.
Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.
03What this is NOT
They are NOT the same unless the investment paid nothing. For dividend payers and bonds, total return is higher than price return, sometimes by a wide margin over time.
Plain-English answers from our glossary. Receipts included. Never advice.
Educational tool. Answers come only from ClearMoneySchool's published glossary and are not advice. Why we never give advice