What is a 30-day SEC yield?

The SEC yield is a more current reflection of how the fund has performed recently, compared to the trailing perspective that the distribution yield can offer. 30-day SEC yield calculates the last 30 days of income earned by the fund and divides it by the NAV on the last day of the period.

Why is a 30-day yield important?

Because bond-carrying funds, like mutual funds or exchange-traded funds (ETFs), don't often carry bonds to maturity, the 30-day yield can give investors an idea of the fund's income goals and how its assets are managed. Both the 30-day yield and the distribution yield are important to consider when choosing a bond fund.

What's the difference between a 30-day yield and a distribution yield?

However, they're not the same. The 30-day yield uses the past 30 days of dividend and interest income to project the fund's income for the next 12 months, while the distribution yield takes the most recent distribution -- whether interest, dividends, or capital gains -- and multiplies that payment by 12 to get an annualized total.