The 30 Day Yield calculator computes the SEC's 30 day yield function for bond funds. The formula translates the bond fund's current income into a standardized yield for reporting and comparison purposes.
INSTRUCTIONS: Choose units and enter the following:
- (a) Income in prior 30 days
- (b) Accrued expenses in prior 30 days
- (c) Mean daily number of outstanding shares or interests that were entitled to distributions
- (d) Maximum public offering price per share on the last day of the period
30 Day Yield (y): The calculator returns the yield as a percent.
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The Math / Science
The formula for the 30 Day Yield is:
`y = 2[ ((a-b)/(c*d) +1)^6 - 1]`
where:
- y = 30 Day Yield
- a = income of prior 30 days
- b = accrued expenses of prior 30 days
- c = mean daily number of outstanding shares
- d = max public offering per share on the last day of period
The SEC yield calculation for a bond fund is essentially a yield to maturity for the bond portfolio. Because bond funds trade actively and prices fluctuate, the rate may not be a good indicator of future results. However, because the calculation is standardized, it provides a good comparison measure for funds.
In the United States, 30-day yield is a standardized yield calculation for bond funds. The formula for calculating 30-day yield is specified by the U.S. Securities and Exchange Commission (SEC). The formula translates the bond fund's current portfolio income into a standardized yield for reporting and comparison purposes. A bond fund's 30-day yield may appear in the fund's "Statement of Additional Information (SAI)" in its prospectus.
Because the 30-day yield is a standardized mandatory calculation for all United States bond funds, it serves as a common ground comparison of yield performance. Its weakness lies in the fact that funds tend to trade actively and do not hold bonds until maturity. In addition, funds do not mature. For this reason, analysts[who?] often consider a distribution yield to be a better measure of a fund's income-generating potential.[citation needed]
United States money market funds report a 7 Day SEC Yield. The rate expresses how much the fund would yield if it paid income at the same level as it did in the prior 7 days for a whole year. It is calculated by taking the sum of the income paid out over the period divided by 7, and multiplying that quantity by 36500 (365 days x 100).
Basic Investor Calculators
- Black-Scholes Equation: Compute the Call and Put Option based on the Black-Scholes equation and the stock or spot price, strike price, number of years to maturity, percent volatility and the risk-free rate.
- 30 Day Yield Equation: Computes the SEC's 30 day yield function for bond funds based on the income in the prior 30 days, accrued expenses in the prior 30 days, outstanding shares and max price per share.
- Investment Return Rate: Computes the return rate based on the beginning and end price and dividends paid.
- Inflation Adjusted Return: Computes the return rate based on the Inflation Rate and the Investment Return.
- Present Value- computes the present value of a fixed annuity.
- Future Value- computes the future value of a fixed annuity.
- Interest Rate for Future Value - computes the annual fixed interest rate required for a present value to accrue to the future value over a number of periods.
- Number of Periods Required - computes the number of periods required to achieve a future value from a present value at a fixed annual interest rate.
- Precious Metal Value - computes the current market value of gold, platinum, silver and palladium based on bullion weight and purity.
- Currency Conversion - computes the current value of a currency amount (e.g., $2,000 US dollars) in Euros, Great Britain Pounds, Canadian Dollars, Yuan, Yen, Rubbles, Swiss Francs, Australian Dollars, South African Rands, Brazial Reals, Mexican Pesos, Indian Rupees and U.S. dollars.
REFERENCE
- Wikipedia - http://en.wikipedia.org/wiki/30-day_yield