Distribution yield

Definition

Distribution yield (also historic or trailing yield) is the sum of distributions a share class paid over the last twelve months, divided by the current NAV or, for an ETF, the current market price. A share class that paid 2.40 per share over the year and trades at 100 has a distribution yield of 2.4%. Only distributing share classes have a meaningful distribution yield; accumulating classes report zero because income is retained.

Why it matters

It is the number income-focused investors and their advisers look at first, and it is widely shown on factsheets and product pages. It is backward-looking: it tells you what was paid, not what will be. For bond funds it is often compared with yield to maturity, which is forward-looking and based on the current holdings, and the two can differ substantially when rates have moved.

In the API

The payload carries the distribution policy in keyFacts.distribution. For bond funds headlineMetrics.yieldToMaturity gives the portfolio yield, which is a different measure and should be labelled as such in your interface. Example values:

json
{
  "shareClass": "EUR Dist",
  "keyFacts": { "distribution": "Distributing", "currency": "EUR" },
  "headlineMetrics": { "yieldToMaturity": 3.9 }
}

Common pitfalls

Fund houses vary in the denominator (NAV vs market price, current vs average) and in whether special or capital distributions are included. Yields based on a recent price can spike when the price falls, which says nothing about the fund's income prospects. Never present a yield as a guaranteed income; distributions are discretionary and can be cut.