# Is ETF yield displayed after MER?



## joepipe (Jul 14, 2017)

When I'm looking up ETFs and stocks on the globe and mail or Morningstar for example, is the yield shown being calculated after or before MERs and fees? 

For example zdv etf shows 4.41% and 0.39% mer.... Is the yield actually 4.02%?

http://quote.morningstar.ca/quicktakes/etf/etf_ca.aspx?t=ZDV


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## AltaRed (Jun 8, 2009)

It varies depending on how each ETF provider characterizes it... In this case BMO calls the 4.41% an annualized distribution yield


> 1 Annualized Distribution Yield: The most recent regular distribution (excluding year end distributions for those ETFs that distribute more frequently) annualized for frequency divided by current NAV.


 as described here https://www.bmo.com/gam/ca/advisor/...sh!overview#fundUrl=/fundProfile/ZDV#overview

This annualized distribution yield could vary monthly, but typically changes less often. I tend to look at a few years of distributions to see the trend because actual yield percentage will vary according to ETF market prices and changes in the dividend distributions of the underlying holdings. Never assume yield percentage remains constant.

Go to the ETF provider's individual Fact Sheets to see what quoted yield percentage means.


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## canew90 (Jul 13, 2016)

ETF distributions include other items than just yield. There may be capital gains and even return of capital.


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## AltaRed (Jun 8, 2009)

canew90 said:


> ETF distributions include other items than just yield. There may be capital gains and even return of capital.


The entire payout is a 'distribution' yield as it is for a REIT or any other trust structured asset. Yield is yield no matter what type of income it is.

The type of income is broken down by the ETF provider either only at year end (and T3 tax slip) or, in some cases, ETF providers break it down for each monthly, quarterly, or semi-annual distribution.


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## joepipe (Jul 14, 2017)

Thanks for clarifying


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## OnlyMyOpinion (Sep 1, 2013)

Joe your thread asked if the yield is an after-MER number.
I think you may be mixing percentages:
The 12 month distribution yield of 4.41% that you noted is a function of the distributions made per net asset value, on a per share (or unit) basis. The MER doesn't enter into it.
Where the MER is a consideration is when you are looking at the return. In your example if you click on the 'Performance' tab you will see for example, a one year total return of 12.52% based on the price of ZDV. That return, and all returns you see reported in Morningstar should be net of (after) the MER. Think of the return as the total growth in the value of a share over the year, including the distributions mentioned (and reinvested) plus any capital gains.


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## AltaRed (Jun 8, 2009)

OnlyMyOpinion said:


> The 12 month distribution yield of 4.41% that you noted is a function of the distributions made per net asset value, on a per share (or unit) basis. The MER doesn't enter into it.


Meaning it is the yield of a unit net of MER, i.e. what is actually distributed. 

What I didn't say it is important to understand the definition of what is being discussed. Sometimes an ETF sponsor will include 12 month trailing yield which is the yield (net of MER) of the past 12 months.

Bond ETFs are even more complicated with 3-4 different yields being discussed.


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