All videos · NISM Series V-A · Chapter 11
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Why funds are compared with TRI, not PRI
A Total Return Index includes dividends, so it is higher and harder to beat than a Price Return Index. Schemes are benchmarked to TRI since February 2018.
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The full concept: Price Return Index vs Total Return Index
Worked example: In a year the Nifty 50 price index rose 10% and companies paid about 1.5% in dividends. The TRI rose about 11.5%, so a fund that returned 11% beat the PRI but lagged the TRI.
Exam trap: TRI does not exclude dividends and is not easier to beat; it is harder, because it is higher than the PRI.
