Bond Fund Yield Calculations

 

Here are the definitions and formulas for calculating the three primary types of yield on bond funds.  Don’t understand Bond Fund Yield?  See our post on how you make money with bond funds.

 

Distribution Yield Formula

The most recent Interest distributions, excludes capital gains, per share  Minus fund expenses, then Divided by  Net Asset Value (NAV) as of the last day of the previous month Multiplied by 12 (in the case of monthly distributions).

(Most Recent Income Distribution – Expenses) / NAV x 12 = Distribution Yield

For a more detailed overview of what distribution yield is and how its used go here.

 

12 Month Yield Formula

All interest Distributions, excludes capital gains, for the last 12 months per share  Minus fund expenses, then Divided By Net Asset Value as of the last day of the previous month and Capital Gains distributions for the last 12 months

(Income Distributions For The Last Year – Expenses) / (NAV + Capital Gains) = 12 Month Yield

For a more detailed overview of what 12 Month distribution yield is and how its used go here.

 

SEC Yield Formula

Interest Income (including both Interest Distributions + Changes In Bond Values Attributable To Bonds Moving Towards Maturity ) for the last 30 days Minus fund expenses, then Compounded To Provide An Annualized Return

((Interest Income For The Last 30 Days – Expenses) / NAV ^6-1) x 2 =  SEC Yield

For a more detailed overview of what SEC Yield is and how its used go here.

Want more information on bond mutual funds and ETFs?  Visit the Bond Funds section of Learn Bonds.

Print Friendly

Get Free Market Updates

Related posts:

                          

Leave a Reply

Your email address will not be published. Required fields are marked *