30-Day Yield
30-Day Yield refers to the yield on a Money Market Fund or similar investment, calculated over the most recent 30 days. This yield reflects the income generated from the investment as a percentage of its net Asset value (NAV), annualized to provide a standardized rate of return. It helps investors compare the performance of different funds.
To calculate the 30-Day Yield, the formula used is:
- 30-Day Yield = (Interest Earned / Average Daily NAV) x (365 / 30)
Example 1: If a Money Market Fund earned $1,500 in interest over the past 30 days, and its average daily NAV was $1,000,000, the calculation would be:
- 30-Day Yield = ($1,500 / $1,000,000) x (365 / 30) = 0.01825 or 1.83%
Example 2: For a different fund that earned $2,000 in interest with an average daily NAV of $2,500,000, the yield would be:
- 30-Day Yield = ($2,000 / $2,500,000) x (365 / 30) = 0.0243 or 2.43%
Use Case: Investors looking for short-term investment Options often use the 30-Day Yield to evaluate the attractiveness of Money Market Funds, as it provides a snapshot of potential Returns without long-term commitment.