Does yield include expense ratio?

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powercherry5
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Does yield include expense ratio?

Post by powercherry5 »

Simple question. I know net yield accounts for everything like expense ratio's, while gross yield do not. However, places like Vanguard or google finance, or marketwatch don't qualify their yield statistic.

So for example:

https://www.marketwatch.com/investing/fund/vusxx

Is the NET yield after the expense ratio 0.04% which is shown as yield on that page, or is it -0.05%?

Thanks!
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David Jay
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Re: Does yield include expense ratio?

Post by David Jay »

In the financial world, "Yield" is net, after expenses.

But in case that is too clear, there are multiple ways to measure yield. Bond funds, for instance have YTM (yield to maturity), 30 day yield, SEC yield, etc.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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powercherry5
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Re: Does yield include expense ratio?

Post by powercherry5 »

David Jay wrote: Mon Jul 26, 2021 3:06 pm In the financial world, "Yield" is net, after expenses.

But in case that is too clear, there are multiple ways to measure yield. Bond funds, for instance have YTM (yield to maturity), 30 day yield, SEC yield, etc.
OK Thank you. SO then the yield is positive for VUSXX

What about things like 30 day SEC Yield?
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David Jay
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Re: Does yield include expense ratio?

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Others on Bogleheads have suggested that 30 day SEC yield is probably the best way to compare two different funds, because it is a fixed standard from the Securities and Exchange Commission (SEC).
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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powercherry5
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Re: Does yield include expense ratio?

Post by powercherry5 »

David Jay wrote: Mon Jul 26, 2021 7:03 pm Others on Bogleheads have suggested that 30 day SEC yield is probably the best way to compare two different funds, because it is a fixed standard from the Securities and Exchange Commission (SEC).
Is it a net yield though or gross?
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David Jay
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Re: Does yield include expense ratio?

Post by David Jay »

powercherry5 wrote: Tue Jul 27, 2021 11:11 am
David Jay wrote: Mon Jul 26, 2021 7:03 pm Others on Bogleheads have suggested that 30 day SEC yield is probably the best way to compare two different funds, because it is a fixed standard from the Securities and Exchange Commission (SEC).
Is it a net yield though or gross?
It is net, but that doesn’t matter when you are doing a relative comparison. SEC yield does not accurately indicate how big the next dividend payout will be, but is a good yardstick for comparing two similar funds.

Fund A yield is 15% more than fund B. That could be true at 0.2% yield, 2% yield or 20% yield.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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powercherry5
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Re: Does yield include expense ratio?

Post by powercherry5 »

David Jay wrote: Tue Jul 27, 2021 11:41 am
powercherry5 wrote: Tue Jul 27, 2021 11:11 am
David Jay wrote: Mon Jul 26, 2021 7:03 pm Others on Bogleheads have suggested that 30 day SEC yield is probably the best way to compare two different funds, because it is a fixed standard from the Securities and Exchange Commission (SEC).
Is it a net yield though or gross?
It is net, but that doesn’t matter when you are doing a relative comparison. SEC yield does not accurately indicate how big the next dividend payout will be, but is a good yardstick for comparing two similar funds.

Fund A yield is 15% more than fund B. That could be true at 0.2% yield, 2% yield or 20% yield.
I think the reason NET is important is if that if it was gross it wouldn't factor in expense ratio. It is completely possible for a fund to have a higher gross yield while also lower net yield because of expense ratio. Right?
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David Jay
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Re: Does yield include expense ratio?

Post by David Jay »

powercherry5 wrote: Tue Jul 27, 2021 12:50 pm
David Jay wrote: Tue Jul 27, 2021 11:41 am
powercherry5 wrote: Tue Jul 27, 2021 11:11 am
David Jay wrote: Mon Jul 26, 2021 7:03 pm Others on Bogleheads have suggested that 30 day SEC yield is probably the best way to compare two different funds, because it is a fixed standard from the Securities and Exchange Commission (SEC).
Is it a net yield though or gross?
It is net, but that doesn’t matter when you are doing a relative comparison. SEC yield does not accurately indicate how big the next dividend payout will be, but is a good yardstick for comparing two similar funds.

Fund A yield is 15% more than fund B. That could be true at 0.2% yield, 2% yield or 20% yield.
I think the reason NET is important is if that if it was gross it wouldn't factor in expense ratio. It is completely possible for a fund to have a higher gross yield while also lower net yield because of expense ratio. Right?
As I said in my first post above, all "yield" in the financial world is net.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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