THE BEECHMONT CREST ONLINE GUIDE TO STOCKS AND INVESTING
YIELD AND TOTAL RETURN
When evaluating a mutual fund, it is important to assess the fund’s yield and total return.
Yield:
The yield is the interest or dividend income that a bond or fund pays out to shareholders during a specific period of time:
= per share distribution / price per share
= $0.53 / $12.00 = 4.4%
Total Return:
The change in the total value of a fund, calculated on a per-share basis, from the beginning of the year to a specific date. Total return includes capital gains, as well as dividend and interest income.
- First subtract the current value of your holdings in the fund from the initial cost of your investment:= current value – cost of initial investment
= $25,000 – $23,000 = $2000
- Then divide the difference by the cost of the initial investment:
= $2000 / $25000 = 8% return