Value Added Monthly Index (VAMI)
Candlefocus EditorVAMI takes into account the total amount the investment returns, including capital appreciation, income, dividends and other noncash components. It allows potential investors to compare the performance of different funds in order to make informed decisions when selecting a fund to invest in.
To calculate the VAMI, the total return on a $1,000 investment at time zero must first be calculated. This return will then be compounded over the 12-month period to get the VAMI. The starting point for the VAMI is a “baseline” of $1,000 and typically increases over time if the investment returns positive returns.
The VAMI can also be used to evaluate the performance of a portfolio of investments. The metric can be used to identify if the portfolio has increased, decreased or remained the same value over time. If the VAMI has been falling over time, then it may indicate a need to re-balance or adjust the portfolio.
Overall, the VAMI is a helpful tool in assessing the performance of a fund. It shows the potential returns of an investment over a period of time, and can be used to compare the performance of multiple funds. By being aware of the VAMI, investors can be sure to make the most informed decisions when selecting a fund to invest in.