SEC 30-Day/Standardized Yield: A standard yield calculation developed and required by the Securities and Exchange Commission (SEC). It is based on the most recent 30-day period covered by the fund’s filings with the SEC. The yield reflects the dividends and interest earned during the period, after the deduction of the fund’s expenses.
This measure is required by the SEC.
Distribution Yield/Indicated Yield: Calculated by annualizing the most recent fund distribution and dividing by the fund’s current NAV. The yield represents a single distribution from the fund and does not represent the total returns of the fund.
Many income-focused investors may be sensitive to how much net yield is distributed to fund shareholders. This amount is perhaps the most difficult to forecast in an exchange-traded fund.
12-Month Yield: The sum of the per-share dividends over the last 12 months, divided by the fund’s current net asset value (NAV).
In short, this is a 12-month trailing calculation of the distribution yield, mentioned above.
In conclusion, while no single yield can give investors a completely transparent picture of a fund’s income potential, the values listed above may provide some guidance to help them make their decisions.
Important Risks Related to this Article
There are risks associated with investing, including possible loss of principal. Fixed income investments are subject to interest rate risk; their value will normally decline as interest rates rise. In addition, when interest rates fall, income may decline. Fixed income investments are also subject to credit risk, the risk that the issuer of a bond will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline. Derivative investments can be volatile, and these investments may be less liquid than other securities, and more sensitive to the effects of varied economic conditions. Please read the Fund’s prospectus for specific details regarding the Fund’s risk profile.