How to interpret stock performance charts "vs S&P 500"

Question

I'm new to investing, and have been trying to reconcile what various financial advisors recommend for long-term holdings. Some recommend sticking to passively managed index funds, claiming that few, if any, actively managed funds consistently track the market, let alone beat it; others recommend certain active funds precisely because they consistently outperform the market.

They can't both be right, so I fire up my trusty web browser and try to compare for myself. Unfortunately, I find the performance charts from various sources to conflict in the same way as the financial advisors. For example, consider 5-year performance of the ABALX mutual fund. On TD Ameritrade, I find the following performance chart, which (to my untrained eye) clearly shows ABALX lagging significantly behind S&P 500:

On the other hand, the same performance chart at CNN Money just as clearly shows ABALX significantly outperforming S&P 500:

For additional confusion, Yahoo Finance conflicts with both of the previous charts:

TD and CNN agree on the performance of ABALX itself, but they disagree wildly on the performance of S&P 500... and Yahoo disagrees with both. I would have expected all these to be reliable sources, but something seems very wrong here.

Note: I chose TD, CNN, and Yahoo because they were the sites I could find that make it easy to generate charts; and ABALX because a financial advisor happened to mention it as a personal favorite. I've seen similar trends with almost every mutual fund and ETF I've looked at, though.

So my question: Which of these charts is correct? And in general, is there a better way to be comparing performance of a particular investment vs. "the market" that is less likely to lead to this sort of confusion?

Answer 1

tl;dr: The CNN Money and Yahoo Finance charts are wildly inaccurate. The TD Ameritrade chart appears to be accurate and shows returns with reinvested dividends. Ignoring buggy data, CNN most likely shows reinvested dividends for quoted securities but not for the S&P 500 index. Yahoo most likely shows all returns without reinvested dividends.

Thanks to a tip from Grade Eh Bacon, I was able to determine that TD Ameritrade reports returns with reinvested dividends (as it claims to do). Eyeballing the chart, it appears that S&P 500 grew by ~90% over the five year period the chart covers. Meanwhile, according to this S&P 500 return estimator, the five year return of S&P 500, with reinvested dividends, was 97.1% between July 2012 to July 2017 (vs. 78.4% raw returns).

I have no idea what numbers CNN Money is working from, because it claims S&P 500 only grew about 35% over the last five years, which is less than half of the raw return. Ditto for Yahoo, which claims 45% growth.

Even stranger still, the CNN chart for VFINX (an S&P 500 index fund) clearly shows the correct market growth (without reinvesting dividends from the S&P 500 index), so whatever problem exists is inconsistent:

Yahoo also agrees with itself for VFINX, but comes in a bit low even if your assume no reinvestment of dividends (68% vs. 78% expected); I'm not sure if it's ever right.

By way of comparison, TD's chart for VFINX seems to be consistent with its ABALX chart and with reality:

As a final sanity check, I pulled historical ^GSPC prices from Yahoo Finance. It closed at $1406.58 on 27 Aug 2012 and $2477.55 on 28 Aug 2017, or 76.1% growth overall. That agrees with TD and the return calculator above, and disagrees with CNN Money (on ABALX). Worse, Yahoo's own charts (both ABALX and VFINX) disagree with Yahoo's own historical data.