In the United States, 30-day yield is a standardized yield calculation for bond funds. The formula for calculating 30-day yield is specified by the U.S. Securities and Exchange Commission (SEC). The formula translates the bond fund's current portfolio income into a standardized yield for reporting and comparison purposes. A bond fund's 30-day yield may appear in the fund's "Statement of Additional Information (SAI)" in its prospectus.
Because the 30-day yield is a standardized mandatory calculation for all United States bond funds, it serves as a common ground comparison of yield performance. Its weakness lies in the fact that funds tend to trade actively and do not hold bonds until maturity. In addition, funds do not mature. For this reason, analysts often consider a distribution yield to be a better measure of a fund's income-generating potential.
United States money market funds report a 7 Day SEC Yield. The rate expresses how much the fund would yield if it paid income at the same level as it did in the prior 7 days for a whole year. It is calculated by taking the sum of the income paid out over the period divided by 7, and multiplying that quantity by 36500 (365 days x 100).
Read more about 30-day Yield: Bond Fund Yield Calculation
Famous quotes containing the word yield:
“They are not callow like the young of most birds, but more perfectly developed and precocious even than chickens. The remarkably adult yet innocent expression of their open and serene eyes is very memorable. All intelligence seems reflected in them. They suggest not merely the purity of infancy, but a wisdom clarified by experience. Such an eye was not born when the bird was, but is coeval with the sky it reflects. The woods do not yield another such a gem.”
—Henry David Thoreau (1817–1862)