Bond Fund Yield Calculation
The SEC yield calculation for a bond fund is essentially a yield to maturity for the bond portfolio. Because bond funds trade actively and prices fluctuate, the rate may not be a good indicator of future results. However, because the calculation is standardized, it provides a good comparison measure for funds.
The formula for SEC 30-day yield is
Where:
- a = dividends and interest
- b = accrued expenses
- c = average daily number of outstanding shares that were entitled to distributions
- d = the maximum public offering price per share on the last day of the period
Read more about this topic: 30-day Yield
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