Calculating % profit on MUTUAL FUNDS... after cash dividends?

Question

"Yes" -- I asked this question (sort of) about a stock... BUT Mutual Funds share price goes DOWN after a distribution (Yahoo's Historical Prices last column is for price AFTER Adjusting for dividends).
So, if I bought 100 shares 2 years ago at $ 10. a share, taken out $ 200. in
distributions, thus still have 100 shares, but the price TODAY is now $ 8.00,
how should I compute my % profit (IGNORE
the TAX angles)???

Answer 1

It depends on the date of that distribution, and the price on that date. Here's an example

12/1/2004
Purchase 100 @ $10
Total Value=1000

12/1/2005
Price = 12
Total Value=1200
Return 12/1/2004-12/1/2005=20%

Distribution $200
Total Value After Distribution=1000

12/1/2006
Price=8
Total Value=800
Return 12/1/2005-12/1/2006 = -20%

Average Annual Return=
[(1.2*0.8)^(1/2)]-1= -2.02%

***Edit***
I just saw that you are using adjusted prices. Never mind all that math. When the prices are adjusted, all of the previous prices are moved downward by the amount of the distribution so that you can compare pre and post distribution prices without having to go through all of the individual period return calculations. Your rate of return is just
[ending price/beginning(adjusted) price]-1. Then you can calculate the average annual return from that number.