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Total return index is a more transparent benchmark

It takes into account dividend payout of constituent stocks to help investors with better ideas

Sanjay Kumar Singh 

DSP Blackrock Mutual Fund announced recently that all its active equity funds will be benchmarked against total-return indices. So far, only Quantum Mutual Fund benchmarked its equity funds against a total return index. Their use is widespread in developed markets.

Experts say using a total return index as benchmark is a more transparent way of showcasing fund performance. Most equity funds in India are benchmarked against price-return indices. The Nifty, Sensex and most other indices we come across are price-return indices. “Price indices are designed to track only the ...

First Published: Tue, August 29 2017. 23:08 IST

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