what is a value added monthly index vami 
a value added monthly index vami tracks the monthly performance of a hypothetical 1 000 investment assuming reinvestment over a period of time understanding a value added monthly index vami a value added monthly index charts the total return gained by an investor over a specified period of time it includes capital gains as well as reinvestment of any disbursements such as dividends and additional interest earned through compounding another key aspect of vami is that it is calculated using net monthly returns this means that any applicable fees such as management incentive brokerage fees have already been deducted and what s left is the real return this is one of the most commonly used metrics to depict a fund s overall performance to investors vami s popularity stems from the fact that it is quite descriptive in that it shows an investor how 1 000 has performed over a given period and that it is easy to understand a value added monthly index can be used for a variety of purposes it may provide insight into the growth of invested capital over time sometimes it can be used to evaluate the performance of a fund manager it is also helpful in comparing multiple funds and index benchmarks vami is calculated by multiplying the previous month s vami by the current month s net return using vami for comparisonvami charts can be a reliable way to compare the growth of various funds and benchmarks across the market investors can customize these charts to choose from the options in a fund company s family of funds vami charts provide investors with a perspective on how an investment has performed over time they may also provide insight on potential expectations with future projections vami charts can also provide a visual representation of how similar funds or funds from different asset class categories have performed over a specified time frame with benchmark returns also included for broader analysis vami toolsnumerous market platforms provide vami tools for investor analysis these tools can allow for varying inputs such as higher initial capital values and varying durations a value added monthly index can be constructed using technical software programming it typically begins with a hypothetical investment of 1 000 however initial investment levels can vary when using this modeling technique it is important to ensure the availability and quality of data to provide relevant charting as estimated outcomes can be skewed by data quality vami charts can be built in microsoft excel or other technical software programs online versions are often provided by financial services companies to help provide a graphical representation of investment values over time morningstar provides an example with its vami tool which is part of its research offering for mutual funds under the chart tab investors are provided with the hypothetical growth of an initial 10 000 investment when researching the vanguard 500 index fund for the one year period from jan 26 2017 to jan 26 2018 the vami chart shows that an investor s 10 000 investment would have increased to more than 12 500 