Glossary · Returns
Dividend yield
The income a fund or share has paid over the last twelve months, as a percentage of its current price.
A historic dividend yield divides the income paid over the past twelve months by today’s price. If the price falls while the income stays the same, the yield rises — so a high yield can reflect a falling price rather than a rising income.
Fund providers publish their own yield measures and the methods differ: some take charges from income, others from capital, which changes the figure. An accumulating fund reinvests its income instead of paying it out, so its yield shows up in the price rather than as cash.
A yield describes what was paid, not what will be. Companies can cut or stop dividends, and a fund’s income changes with its holdings. The dates when a fund goes ex-dividend and when it pays are set and published by the fund’s provider.
On Fundology: Dividend and income funds
Related terms
- Accumulation vs income unitsAccumulation units reinvest the fund’s income automatically; income units pay it out as cash.
- Total returnThe return of an investment including income (dividends or interest), not just the change in price.
- NAVThe per-unit value of a fund’s assets after its liabilities, normally struck once per day.
More terms on returns
Definitions describe how a term is used on Fundology. This is information, not advice.