What Is the Yield of a Mutual Fund?

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The yield of a mutual fund is different than the yield of a certificate of deposit, and it is affected by the expense ratios that are placed on the mutual fund. Use caution when looking for a high yield mutual fund with help from a registered financial consultant in this free video on investments and personal finance.

Part of the Video Series: Beginner Investing
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Video Transcript

This is financial adviser, Patrick Munro, talking about What Is the Yield of a Mutual Fund? A mutual fund is hoping, many times, to post a positive yield for the return to the shareholders that give them the money to invest in the fund. And hopefully, that yield curve is up and not down. If it's up, that means the fund in bullish, and if it's down that means the fund is bearish in the terms of the stock market. The yield of the mutual fund is different than the yield of a certificate of deposit, which is strictly tied to simpler compound rates of interest. The yield of a mutual fund is affected by the expense ratios that are placed on the mutual fund charged by the fund manager. So if you're looking for a high yield on a mutual fund, be cautiously aware of the expenses that are inherent with that mutual fund, as well, going forward, because sometimes you can have a lower rate of return in the market and a lower expense ratio, and yet have a higher yield, because you've kept your expenses low. This is Patrick Munro talking about the yield of mutual funds.

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