You have the wrong division here. The fund price on 2/29 was $100.63, and the February dividend is 29/366 of the annual dividend, so the correct annualization of the monthly distribution yield is (.2874/100.63)*(366.29), which is 3.60%. The SEC yield is based on a six-month term and then doubled to get an annual yield, so it is actually ((1+.0360/12)^6 - 1)/2 = 3.63%.According to Fidelity, VTEC announced a distribution of $0.2874 on 03/01/2024.
Am I correct in interpreting this as a 30 day yield of 2.874%?
Even this is not quite correct, because the ETF may have been gaining assets during the month. If an ETF holds a bond for $1000 with a 3.66% yield, this contributes $2.90 to the February dividend if the bond was held all month, and only $0.10 if the bond was acquired February 29; the full $1000 is part of the net asset value either way and is thus part of the SEC yield.
In a mutual fund which declares dividends daily, an investor who held $1000 in the fund for the whole month would receive a $2.90 dividend; an investor who bought $1000 of the fund on February 29, causing the fund to buy a bond that day, would receive only a $0.10 dividend which is the fund's income on holding a bond for one day. But ETFs declare dividends monthly, so both investors will get the same dividend, which will be in between the two values.
Statistics: Posted by grabiner — Tue Mar 05, 2024 9:36 pm