Yield is the rate of return on an investment, usually expressed as a percentage of the amount initially invested. Investment yield is a primary concern of the investor, along with the risk of loss associated with an investment.
Yield is typically stated as an annualized number. Thus, if there is an actual return of $100 on an investment of $1,000 after three months, it is considered to have a yield of 40% on an annualized basis (the actual 10% return multiplied by four quarters).
The yield calculation should include unrealized gains or losses on those investments that an investor continues to hold (such as bonds or stock); otherwise, the yield will only be based on dividends or interest payments, and so will not represent a complete picture of the return on investment.
When an investment is in a fund, the yield is calculated as the income generated by the fund minus fund expenses, divided by the investment.