The S&P 500 is a stock market index that tracks the performance of the 500 largest publicly traded companies in the United States. There are two versions of the S&P 500 index: the price return version and the total return version.
The S&P 500 price return index measures the performance of the index based solely on the price movements of the individual stocks that make up the index. It does not take into account any dividends paid by the companies in the index.
The S&P 500 total return index, on the other hand, measures the total return of the index, including both the price movements of the individual stocks and any dividends paid by the companies in the index. The total return index assumes that any dividends paid by the companies are reinvested in the index, which means that any dividends paid out are used to purchase additional shares of those companies' stocks.
The total return index provides a more accurate picture of the overall performance of the S&P 500 over time, as it includes the impact of dividend payments on the total return of the index. However, the price return index can still be useful for evaluating the performance of the index based solely on the price movements of the individual stocks without the impact of dividends.
