Yield
There are 3 possible types of yield that may be quoted on Investec factsheets:
Historic yield
This is calculated for funds paying dividend distributions. It reflects distributions declared over the past 12 months as a percentage of the net asset value per share/mid-market unit price as at the date shown. It does not include any initial sales charge and investors may be subject to tax on their distributions.
Where the fund’s expenses are all or part charged to capital, currently Investec OEIC UK Special Situations Fund, this has the effect of increasing the fund's distributions (which may be taxable) and constraining the fund’s capital performance to an equivalent extent.
Distribution yield
This is calculated for funds paying interest distributions. It is the annualised gross revenue of the fund’s portfolio at a point in time less expenses paid from revenue, expressed as a percentage of the fund’s mid market value. It does not include any initial sales charge and investors may be subject to tax on their distributions.
Where the fund’s expenses are charged to capital, currently:
GSF Emerging Markets Debt Fund
GSF Global Strategic Income Fund
GSF High Income Bond Fund
GSF Investment Grade Corporate Bond Fund
OEIC Emerging Markets Debt Fund
OEIC Managed Distribution Fund
OEIC Monthly High Income Fund
this has the effect of increasing the fund’s distribution (which may be taxable) and constraining its capital performance to an equivalent extent.
Underlying yield
This is calculated for certain onshore Investec OEIC funds paying interest distributions and is the same calculation as the Distribution yield unless:
- income is distributed on a coupon basis (which onshore Investec funds presently don’t)
- fees are all or part charged to capital, which is currently the case for the following onshore Investec OEIC funds: Emerging Markets Debt Fund, Managed Distribution Fund, Monthly High Income Fund
In the case of funds paying fees all or part from capital, the Underlying yield is the annualised revenue of the fund’s portfolio at a point in time less expenses paid from revenue and capital (excluding transaction fees), expressed as a percentage of the fund’s mid market value. It does not include any initial sales charge and investors may be subject to tax on their distributions.
For the onshore Investec OEIC Funds mentioned above, the Distribution yield is higher than the Underlying yield because all or part of the fund’s expenses are charged to capital. This has the effect of increasing the distribution(s) (which may be taxable) and constraining the fund’s capital performance.
When the Distribution yield is higher than the Underlying yield on the onshore Investec OEIC funds, both the Underlying yield and the Distribution yield are quoted in documents. When the Distribution yield is the same as the Underlying yield, the Distribution yield is also the Underlying yield for the fund.
Yield Curve
A graphical representation of all the yields of bonds of the same quality with maturities ranging from the shortest to the longest available. Short-term rates tend to be lower than long-term because investors usually expect to be compensated for locking up their money for the long-term. When the yield curve is inverted, with short-term rates greater than long-term rates, interest rates are expected to fall in the future.
Yield to Maturity
The rate of return anticipated on a bond if it is held until the maturity date, expressed as an annual rate. The calculation of YTM takes into account the current market price, par value, coupon interest rate and time to maturity. It is also assumed that all coupons are reinvested at the same rate.
