I like Vanguard's take on the SEC Yield:That is not correct. The SEC Yield is a snapshoot of the actual return of the fund for the past 30 days. It consists of the interest income accrued by the fund plus the increase in price of bonds bought at a discount by the fund less the decrease in the value of bonds bought at a premium and less the funds expenses during this 30 day period. This amount is then divided by the funds price on the day the SEC Yield is calculated.
The SEC Yield is the yield that you will receive going forward (looking forward); funds are required to make their best effort to estimate this and report.
Thus SEC Yield and Distribution Yield of a bond fund are both backwards looking.
https://www.investopedia.com/terms/s/se ... the%20SEC.
Since SEC yield takes into account market yield to maturity, isn't that forward looking?SEC yield
A non-money market fund's SEC yield is based on a formula developed by the SEC. The method calculates a fund's hypothetical annualized income as a percentage of its assets.
A security's income, for the purposes of this calculation, is based on the current market yield to maturity (for bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30-day period. This hypothetical income will differ (at times, significantly) from the fund's actual experience. As a result, income distributions from the fund may be higher or lower than implied by the SEC yield.
The SEC yield for a money market fund is calculated by annualizing its daily income distributions for the previous 7 days.
I vote that the distribution yield table for Vanguard products does have past information, but the most recent distribution would be the current payout.
I believe that the SEC Yield can tell one where the future distributions are moving. Are they rising or falling.
A higher SEC Yield than the current payout is a useful sign of a larger payout...at least over the next several months.
Statistics: Posted by hudson — Sun May 05, 2024 8:33 am — Replies 23 — Views 1280