S&P 500 vs S&P 500 TR
The same five hundred companies, counted two ways. The S&P 500 you see quoted tracks share prices only; its total-return version assumes every dividend is reinvested on the day it is paid. The gap between the two curves is not a contest between two investments — it measures the part of the return the famous index leaves out.
Over the period both series share, S&P 500 TR comes out ahead at +11.4% a year.
| Asset | Total return | Annualised | Volatility | Largest drawdown |
|---|---|---|---|---|
| S&P 500 | ×29.8 | +9.2% a year | 15.5% | −54.7% (March 2009) |
| S&P 500 TR | ×66.8 | +11.4% a year | 15.3% | −53.1% (March 2009) |
Figures calculated on 26/10/2026 from monthly closing prices. Past performance is no guide to future performance.
What a price index leaves on the table
When a company pays a dividend, its share price drops by roughly the amount paid — the cash has left the business. A price index records that drop and stops there, while the shareholder has the money in hand. Repeated four times a year across five hundred companies for decades, the omission becomes very large.
The S&P 500 Total Return index redoes the arithmetic, reinvesting each dividend in the index the same day. It is a gross measure: no withholding tax is deducted. S&P also publishes a net version, which applies the tax a foreign holder would suffer, and which therefore sits below it.
Why the gap accelerates
A reinvested dividend buys units that pay dividends of their own. The distance between the two curves does not grow by a fixed amount each year but at an increasing rate, and over a working life it ends up representing a share of the result that the market’s annual yield gives no hint of.
One qualification: the American dividend yield has fallen sharply since the 1980s, companies having largely replaced distributions with buybacks of their own shares. A buyback supports the share price, and therefore does appear in the price index. The gap measured over recent years is for that reason narrower than the gap of earlier decades.
Frequently asked questions
Which version appears in the news?
The price index, always. That is what "the S&P 500" means in a headline, and it is why remembered stock market returns understate what an investment actually produced.
Why does the comparison not go back to 1927?
The price index has a far longer history than its total-return counterpart, whose available series begins in 1988. The comparison starts on the first day both quote, otherwise it would be measuring one curve against nothing.
Does an S&P 500 ETF track the total-return index?
An accumulating ETF comes close, less its fees and the tax it suffers on the dividends it receives. A distributing ETF tracks the price index and pays the dividends out to you: reinvesting them is your job if you want the total-return curve.