Distribution yield
The cash income a fund has distributed to unit holders over the past 12 months, expressed as a percentage of the current unit price. Distinct from total return.
Distribution yield measures the cash income a fund has paid out to unit holders over a defined trailing window — usually the past 12 months — as a percentage of the current unit price. It is the cash-flow component of return, separate from any movement in the unit price itself.
Most NZ retail diversified and equity funds reinvest income rather than distribute it, so their distribution yield is zero or near zero. Income-focused funds — NZ fixed-interest funds, listed-property funds, and some equity-income mandates — distribute cash quarterly or monthly and publish a distribution yield in their fund updates.
Distribution yield is not the same as total return. A fund with a 4% distribution yield and a 2% unit-price decline has a total return of roughly 2%. PIE distributions are taxed at the investor's PIR; the cash distribution received is net of PIE tax already paid by the fund.
Related terms
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NAV · Net asset value
Unit price (NAV)
The price of one unit in a managed fund — the fund's net asset value divided by the number of units on issue. The unit price is what you transact at when buying or selling.
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QFU · Fund Update
Quarterly Fund Update (QFU)
A standardised FMA-mandated quarterly report each NZ retail managed fund publishes, summarising fees, returns, risk indicator, asset mix, top-10 holdings and fund size.
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PIR
Prescribed Investor Rate (PIR)
The tax rate applied to your share of a PIE fund's taxable income. NZ has three PIRs for resident individuals — 10.5%, 17.5% and 28% — chosen using a two-year look-back of taxable + PIE income.