What Is SEC Yield?

The SEC yield — usually quoted as the 30-day SEC yield or the standardized yield — is a regulator-defined formula that expresses a fund's net investment income over its most recent 30-day period as an annual percentage of its share price. Its purpose is comparability. Before it existed, funds could choose flattering ways to advertise income; the standardized formula forces every fund to compute the same number the same way.

Mechanically, the fund totals the interest and dividend income earned during the 30-day period, subtracts accrued expenses, divides by the average number of shares entitled to distributions, and then annualizes the result against the maximum offering price on the final day of the period. Crucially, the formula counts only investment income. Realized capital gains, option premium and return of capital are excluded, which is why a covered-call ETF advertising a 60% distribution rate might carry an SEC yield close to zero.

That gap is the single most useful thing the SEC yield tells an income investor. A large spread between distribution yield and SEC yield means most of the cash you receive is not interest or dividend income — it is premium, gains or your own capital coming back to you. Neither is inherently bad, but they behave very differently for taxes and for long-run NAV. For bond funds, by contrast, the SEC yield is usually the more honest number, because it accounts for premium and discount amortization that a simple distribution figure ignores.

On WeeklyYield the headline yields are distribution-based, since weekly option-income ETFs are the focus and their SEC yields are largely uninformative. Pair the distribution yield with the NAV trend and total return on each fund page to see whether the payout is being funded by strategy income or by the share price.