What Is 7-Day Yield?

The 7-day yield is a standardized way of expressing the income a fund generated over its most recent seven-day period, restated as an annual rate. It was created for money market funds, where the underlying holdings are short-dated instruments whose income changes constantly with prevailing interest rates. Rather than quoting a trailing twelve-month figure that could be months out of date, the 7-day yield answers a narrower and more useful question: if the fund kept earning at the rate it earned last week, what would that be worth over a full year?

The calculation is straightforward. Take the income distributed per share over the seven-day window, subtract fund expenses accrued in that window, divide by the share price (or NAV) at the start of the period, then multiply by 365 and divide by 7 to annualize. In formula form: ((income per share − expenses per share) ÷ starting NAV) × (365 ÷ 7). A fund that paid $0.0019 per share on a $1.00 NAV over seven days is running at roughly a 9.9% annualized rate. Some providers publish a compounded variant, the 7-day effective yield, which assumes each week's income is reinvested and therefore prints slightly higher than the simple figure.

The 7-day yield is not the same thing as the SEC yield. The 30-day SEC yield uses a longer window and a prescribed formula built around accrued interest income net of expenses, which makes it more comparable across bond and money market funds but slower to react. The 7-day figure is more current and more volatile. Neither is a distribution yield: distribution yield extrapolates the cash actually paid, which for an option-income ETF can include return of capital and short-term gains that are not interest income at all.

For weekly-paying dividend ETFs, the concept transfers but the label usually does not. Covered-call and option-income funds distribute the option premium they collect each week, so their most recent weekly distribution annualized over 52 weeks plays the same role a 7-day yield plays for a money market fund: a current-conditions snapshot. That is exactly how WeeklyYield computes the annualized yield you see on every fund page — most recent weekly distribution × 52 ÷ current price. Treat it as a run rate, not a forecast, because option premium expands and contracts with implied volatility, and a rich week can be followed by a thin one.

The practical takeaway: use a 7-day or weekly annualized figure when you want to know what a fund is paying right now, use the 30-day SEC yield when comparing interest-bearing funds on a level playing field, and use total return when you want to know whether you actually made money.