Whats the difference between an SEC yield and a distribution yield?
Prior to 1988, when the Securities and Exchange Commission imposed standards for the way yields must be calculated, performance figures were calculated using many different methods. The SEC implemented the standardized yield formula, which a fund must use when advertising its yield, to enable investors to compare funds on an “apples to apples” basis. The SEC formula annualizes a fund’s yield based on a 30-day trailing period of time. It reflects a current picture of the yield based on the current interest rate environment and takes into account a bond’s yield to maturity.
