The Portfolio Dividend Yield calculates the weighted annual cash payouts generated by the underlying companies within your strategy, expressed as a percentage of the total portfolio valuation.
While capital appreciation (price going up) represents unrealized gains, dividends represent hard, realized cash flow deposited directly into your brokerage account regardless of market volatility.
Total Return vs. Price Return
When evaluating a Kalpi backtest, it is critical to understand the impact of your dividend yield on your CAGR.
Total Return = Price Appreciation + Dividend Yield
If your algorithmic strategy targets high-yield utility and energy companies, a massive portion of your strategy’s edge comes from dividend compounding rather than pure price breakouts.
The Reinvestment Edge: A strategy with a 4.0% dividend yield will massively outperform its standard price-return curve if you configure your Kalpi backtest to automatically reinvest all dividends back into the portfolio at your designated rebalancing intervals.
