SEC yield is a standardized yield calculation for funds developed by the U.S. Securities and Exchange Commission. Fund companies reporting yield information to the SEC must use this calculation.
What is SEC yield?
The SEC Yield calculation is based on a 30-day period ended on the last day of the previous month. It represents the hypothetical income an investor would earn from the fund over a 12-month period if the fund continued earning at the same rate as the 30-day calculation period. SEC Yield is not a perfect indicator of future performance; a fund’s actual yield may differ from its SEC Yield.
The SEC Yield formula: Yield=2(((a−b)/(cd)+1)^6−1)
- a = dividends and interest collected during the 30-day period
- b = accrued expenses during the 30-day period
- 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