17 C.F.R. § 275.205-1

Current through September 30, 2024

Section 275.205-1 - Definition of "investment performance" of an investment company and "investment record" of an appropriate index of securities prices

(a)Investment performance of an investment company for any period shall mean the sum of:

(1) The change in its net asset value per share during such period;

(2) The value of its cash distributions per share accumulated to the end of such period; and

(3) The value of capital gains taxes per share paid or payable on undistributed realized long-term capital gains accumulated to the end of such period; expressed as a percentage of its net asset value per share at the beginning of such period. For this purpose, the value of distributions per share of realized capital gains, of dividends per share paid from investment income and of capital gains taxes per share paid or payable on undistributed realized long-term capital gains shall be treated as reinvested in shares of the investment company at the net asset value per share in effect at the close of business on the record date for the payment of such distributions and dividends and the date on which provision is made for such taxes, after giving effect to such distributions, dividends and taxes.

(b)Investment record of an appropriate index of securities prices for any period shall mean the sum of:

(1) The change in the level of the index during such period; and

(2) The value, computed consistently with the index, of cash distributions made by companies whose securities comprise the index accumulated to the end of such period; expressed as a percentage of the index level at the beginning of such period. For this purpose cash distributions on the securities which comprise the index shall be treated as reinvested in the index at least as frequently as the end of each calendar quarter following the payment of the dividend.

Exhibit I

[METHOD OF COMPUTING THE INVESTMENT RECORD OF THE STANDARD & POOR'S 500 STOCK COMPOSITE INDEX FOR CALENDAR 1971]

Quarterly ending-	Index value¹	Quarterly dividend yield-composite index
Quarterly ending-	Index value¹	Annual percent²	Quarterly percent³ (¹/₄ of annual)[GREATER THAN]
Dec. 1970	92.15
Mar. 1971	100.31	3.10	0.78
June 1971	99.70	3.11	.78
Sept. 1971	98.34	3.14	.79
Dec. 1971	102.09	3.01	.75

¹ Source: Standard & Poor's Trade and Securities Statistics, Jan. 1972, p. 33.

²Id. See Standard & Poor's Trade and Securities Statistics Security and Price Index Record-1970 Edition, p. 133 for explanation of quarterly dividend yield.

³ Quarterly percentages have been founded to two decimal places.

Change in index value for 1971: 102.09 - 92.15 = 9.94.

Accumulated value of dividends for 1971:

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Aggregate value of dividends paid, assuming quarterly reinvestment and computed consistently with the index:

(Percent yield as computed above) * (ending index value) = Aggregate value of dividends paid

For 1971:

.0314 * 102.09 = 3.21

Investment record of Standard & Poor's 500 stock composite index assuming quarterly reinvestment dividends:

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The same method can be extended to cases where an investment company's fiscal quarters do not coincide with the fiscal quarters of the S & P dividend record or to instances where a "rolling period" is used for performance comparisons as indicated by the following example of the calculation of the investment record of the Standard & Poor's 500 Stock Composite Index for the 12 months ended November 1971:

Index value Nov. 30, 1971	93.99
Index value Nov. 30, 1970	87.20
Change in index value	6.79

Quarter ending-	Dividend yield		Rate for each month of quarter (¹/₁₂ of annual)[GREATER THAN]
Quarter ending-	Annual rate	¹/₄ of annual
Dec. 1970	3.41	0.85	0.28
Mar. 1971	3.10	.78	.26
June 1971	3.11	.78	.26
Sept. 1971	3.14	.79	.26
Dec. 1971	3.01	.75	.25

Accumulated value of dividends reinvested:

December = 1.0028

January-March = 1.0078

April-June = 1.0078

July-September = 1.0079

October-November = 1.0053

The rate for October and November would be two-thirds of the yield for the quarter ended Sept. 30 (i.e. .667 * .79 = 5269) since the yield for the quarter ended Dec. 31 would not be available as of Nov. 30.

Dividend yield:

(1.0028 * 1.0078 * 1.0078 * 1.0079 * 1.0053) - 1.00 = .0320

Aggregate value of dividends paid computed consistently with the index:

.0320 * 93.99 = 3.01

Investment record of the Standard & Poor's 500 Stock Composite Index for the 12 months ended November 30, 1971:

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Exhibit II

[METHOD OF COMPUTING THE INVESTMENT RECORD OF THE NEW YORK STOCK EXCHANGE COMPOSITE INDEX FOR CALENDAR 1971]

(1)-Quarter ending	(2)-Index value¹	(3)-Aggregate market value of shares listed on the NYSE as of end of quarter (billions of dollars)²	(4)-Quarterly value of estimated cash payments of shares listed on the NYSE (millions of dollars)³	(5)-Estimated yield⁴ (quarterly percent)[GREATER THAN]
Dec. 1970	50.23
Mar. 1971	55.44	$709	$5,106	0.72
June 1971	55.09	710	4,961	.70
Sept. 1971	54.33	709	5,006	.71
Dec. 1971	56.43	742	5,183	.70

¹ Source: New York Stock Exchange Composite Index as reported daily by the New York Stock Exchange.

² Source: Monthly Review, New York Stock Exchange.

³ Source: The Exchange, New York Stock Exchange magazine, May, Aug., Nov. 1971 and Feb. 1972 editions. Upon request the Statistics Division of the Research Department of the NYSE will make this figure available within 10 days of the end of each quarter.

⁴ The ratio of column 4 to column 3.

Change in NYSE Composite Index value for 1971: 56.43 - 50.23 = 6.20.

Accumulated Value of Dividends of NYSE Composite Index for 1971:

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Aggregate value of dividends paid on NYSE Composite Index assuming quarterly reinvestment:

For 1971:

.0286 * 56.43 = 1.61

Investment record of the New York Stock Exchange Composite Index assuming quarterly reinvestment of dividends:

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The same method can be extended to cases where an investment company's fiscal quarters do not coincide with the fiscal quarters of the NYSE dividend record or to instances where a "rolling period" is used for performance comparisons as indicated by the following example of the calculation of the investment record of the NYSE Composite Index for the 12 months ended November 1971:

Index value Nov. 30, 1971	51.84
Index value Nov. 30, 1970	47.41
Change in index value	4.43

Quarter ending	Dividend yield quarterly percent	Rate for each month of quarter (¹/₁₂ of annual)[GREATER THAN]
Dec. 1970	0.79	0.26
Mar. 1971	.72	.24
June 1971	.70	.23
Sept. 1971	.71	.24
Dec. 1971	.70	.23

Accumulated value of dividends reinvested:

December = 1.0026

January-March = 1.0072

April-June = 1.0070

July-September = 1.0071

October-November = 1.0047

The rate for October and November would be two thirds of the yield for the quarter ended September 30 (i.e. .667 × .71 = 4736), since the yield for the quarter ended December 31 would not be available as of November 30.

Dividend yield:

(1.0026 * 1.0072 * 1.0070 * 1.0071 * 1.0047) - 1.00 = .0289

Aggregate value of dividends paid computed consistently with the index:

.0289 * 51.84 = 1.50

Investment record of the NYSE Composite Index for the 12 months ended November 30, 1971:

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17 C.F.R. §275.205-1

37 FR 17468, Aug. 29, 1972

Secs. 205, 211, 54 Stat. 852, 74 Stat. 887, 15 U.S.C. 80b-205 , 80b-211 ; sec. 25 , 84 Stat. 1432, 1433, Pub. L. 91-547