Calculate 30-day SEC yield, 7-day money market fund yield, and tax-equivalent yield for mutual funds using dividends, expenses, shares, NAV, and tax rates.
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SEC Yield Formula
The following formula is used to calculate an SEC yield.
SECY = 2* (((a-b)/(c*d) + 1 ) ^ 6-1)
- Where SECY is the SEC yield
- a is the interest and dividends received over the last 30 days
- b is the accrued expenses over the last 30-days
- c is the average number of shares outstanding on a daily basis
- d is the maximum price per share on the last day/day of calculation
SEC Yield Definition
What is an SEC yield?
The SEC yield is a calculation that is used when comparing bond funds. It's based on the previous 30-day period when the calculation is taking place.
Example Problem
how to calculate SEC yield?
First, determine the interest and dividends received over the last 30 days. In this example, this is found to be $4,000.00.
Next, determine the accrued expense. This is found to be $3,000.00 for the trailing 30-day period.
Next, determine the average number of shares outstanding. For this problem, this is found to be 1000.
Next, determine the maximum price per share on the current day. This is measured to be $4.00.
Finally, calculate the SEC yield using the formula above:
SECY = 2* (((a-b)/(c*d) + 1 ) ^ 6-1)
SECY = 2* (((4000-3000)/(1000*4) + 1 ) ^6-1)
SECY = 5.629
