Price Vs Growth Question

[marko]

So I'm trying to figure this out and hoping that it's not so obvious that I (once again) demonstrate my lack of math skills, or general, occasional stupidity.

Playing with a few of my investments I noticed that over the past 5 years the price has not moved materially but the growth has gone up nicely.

For example, according to M*, (TRPrice Equity Income Fund) PRFDX has gone down from 33.0 to 30.0 over the past five years, but the five year annual total return has been 6.9%. A similar behaving fund is TRRGX (2015 Fund)

Dividends play a part but the dividends paid are around 2.2%. So where is the rest of the growth coming from? Is the rest of it reinvested Cap Gains? Yes, the price drops dramatically each year-end (Divs&CGs paid) but then recovers in a bit.

I can understand my bond funds keeping a fairly steady price but I'm trying to wrap my head around how you can deliver decent growth--even with dividends helping--and not have an appreciation in price.

Any insight?

 

[COcheesehead]

So I'm trying to figure this out and hoping that it's not so obvious that I (once again) demonstrate my lack of math skills, or general, occasional stupidity.

Playing with a few of my investments I noticed that over the past 5 years the price has not moved materially but the growth has gone up nicely.

For example, according to M*, (TRPrice Equity Income Fund) PRFDX has gone down from 33.0 to 30.0 over the past five years, but the five year annual total return has been 6.9%. A similar behaving fund is TRRGX (2015 Fund)

Dividends play a part but the dividends paid are around 2.2%. So where is the rest of the growth coming from? Is the rest of it reinvested Cap Gains? Yes, the price drops dramatically each year-end (Divs&CGs paid) but then recovers in a bit.

I can understand my bond funds keeping a fairly steady price but I'm trying to wrap my head around how you can deliver decent growth--even with dividends helping--and not have an appreciation in price.

Any insight?

I just posted about this in another thread. The NAV price reflects ex dividend, ex cap gains, etc. So you can't calculate return by looking only at the NAV from point to point. You need add in distributions.