Dividend Yield vs SEC Yield
Understanding two very different yield calculations and which one to trust.
Trailing dividend yield takes the past 12 months of distributions and divides by current price. It's backward-looking and can dramatically overstate expected income if recent payouts spiked.
Distribution yield annualizes the most recent single distribution — used heavily by covered-call ETFs to display eye-catching numbers. A single high week extrapolated to 52 weeks can produce a 100%+ figure.
SEC yield is a standardized 30-day yield the SEC requires bond funds to publish. It's less common on equity ETFs but far more comparable across funds.
For weekly dividend ETFs, focus on trailing 12-month yield combined with NAV total return. A high headline yield paired with a falling NAV is a warning sign.