what is the sec yield 
the sec yield is a standard yield calculation developed by the u s securities and exchange commission sec that allows for fairer comparisons of bond funds it is based on the most recent 30 day period covered by the fund s filings with the sec the yield figure reflects the dividends and interest earned during the period after the deduction of the fund s expenses it is also referred to as the standardized yield understanding the sec yieldthe sec yield is used to compare bond funds because it captures the effective rate of interest an investor may receive in the future it is widely considered a good way to compare mutual funds or exchange traded funds etfs because this yield measure is generally very consistent from month to month the resulting yield calculation shows investors what they would earn in yield over the course of a 12 month period if the fund continued earning the same rate for the rest of the year it is mandatory for funds to calculate this yield this yield differs from the distribution yield which is typically displayed on a bond s website calculation of the sec yieldmost funds calculate a 30 day sec yield on the last day of each month though u s money market funds calculate and report a seven day sec yield the standardized formula for the 30 day sec yield consists of four variables a interest and dividends received over the last 30 day periodb accrued expenses over the last 30 day period excluding reimbursementsc the average number of shares outstanding on a daily basis which were entitled to receive distributionsd the maximum price per share on the day of the calculation the last day of the periodthe formula of the annualized 30 day sec yield is 2 x a b c x d 1 6 1 example of sec yieldassume investment fund x earned 12 500 in dividends and 3 000 in interest the fund also recorded 6 000 worth of expense of which 2 000 was reimbursed the fund has 150 000 shares entitled to receive distributions and on the last day of the period the day the yield is being calculated the highest price the shares reached was 75 in this scenario the variables equal a 12 500 3000 15 500b 6 000 2 000 4 000c 150 000d 75once these numbers are plugged into the formula it looks like this 30 day yield 2 x 15 500 4 000 150 000 x 75 1 6 1 or 2 x 0 00615 1 23 