Skip to Content
Fund Spy

A Tale of Two Yields: Part I

What a comparison of a fund's trailing 12-month and SEC yields can tell us.

Mentioned: , , , , , , , , ,

We recently started displaying the 30-day SEC yield for funds, in addition to the trailing 12-month yield. Whereas a fund's TTM yield is based on its distributions over the trailing 12-month period, its SEC yield is based on what the securities in its portfolio are yielding closer to present day. 

Neither figure is an indicator of a fund's future income-generating potential. A fund's past income returns, distribution history, and net asset value growth or erosion may shed more light on that potential, but even those factors should not be viewed as predictive. Even so, the comparison of a fund's TTM and SEC yields is arguably more useful than looking at either one in isolation. While both yields reflect income generated by bonds, dividend-paying stocks, and other securities, the SEC yield is mandated for any fund that reports its yields--thus providing a standardized approach to a difficult calculation. An increasing number of firms are providing both figures for investors and to Morningstar. Debate over the minutia of each calculation is beyond the scope of this article. Instead, we'll provide a glimpse into what a comparison of a fund's TTM and SEC yields can reveal.

Michael Herbst has a position in the following securities mentioned above: PTTRX. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.