Yield Definition

Learn the definition of yield and other ETF terminology from the etf.com glossary.

Reviewed by: etf.com Staff
Edited by: etf.com Staff

Learn more about Yield

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.

Related Terms

Exchange-Traded Fund, Net Asset Value (NAV)

ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.