Total returns
A bit of context on the recent stock market downturn in Australia.
The S&P/ASX 200 total return index adjusted for franking credits now shows 10-year annual returns in double-digit territory as the global financial crisis crunch recedes out of view.
On 21 October 2008 Aussie shares plunged more than 8 per cent for the weakest day's trade in 21 years - in fact it was the biggest day's drop in the history of the S&P/ASX 200 index - but these figures are now outside the 10-year benchmark.
And, since that time, total returns have been very sound.
Which just goes to show the importance of returns from dividends, especially where those dividends are franked.
This franking credit adjusted index was first created by S&P in 2014, and back-tested accordingly.
