Yield Definition
Learn the definition of yield and other ETF terminology from the etf.com glossary.
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Yield in ETFs epitomizes the income generated by the fund's holdings, expressed as a percentage of its Net Asset Value (NAV). This income, derived from dividends, interest payments, or other sources, is a critical consideration for income-seeking investors. High-yield ETFs often invest in assets with higher income potential, such as dividend-paying stocks or high-yield bonds. Yield serves as a barometer for investors evaluating the income-generating potential of an ETF, contributing to portfolio construction strategies aimed at optimizing cash flow and achieving a balance between income and capital appreciation within the context of specific investment objectives.
