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
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
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
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