Mutual Funds Glossary

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Yield

Current income (interest or dividends) paid by a fund, expressed as a percentage of the investment's price.

Yield Curve

A graph depicting yield as it relates to maturity. If short-term rates are lower than long-term rates, it is called a positive yield curve. If short-term rates are higher, it is called a negative, or inverted, yield curve. If there is little difference, it is called a flat yield curve.

Yield to Maturity (YTM)

The effective annual rate of return earned by a bond if held to maturity. This rate takes into account the amount paid for the bond, the length of time to maturity, and assumes coupon payments can be reinvested at the yield to maturity.