My understanding is that a stock ETF's distribution yield is not the same as its dividend yield, since the former is net taxes and fund fees and might also include "other distributions" than just dividends, whereas the latter is simply the dividends of the underlying holdings in relation to current share price.

So basically the index dividend yield doesn't matter, only the distribution yield does, since that's the money that actually ends up in my bank account correct?

However, I noticed that some popular ETFs such as the Vanguard FTSE All World High Dividend Yield ETF does not even list a distribution yield, just something called "equity yield (dividend)" which I thought was odd, since I always thought of the equity yield as the total return including share appreciation, but OK.

Here is the fact sheet for reference: https://www.justetf.com/servlet/download?isin=IE00B8GKDB10&documentType=MR&lang=en

My question is: how would I be able to work out what the distribution yield is for this ETF to decide whether this is a good investment, assuming I'm mostly interested in cash flows i.e. dividends not price appreciation?

1 Answer 1


From the fact sheet, Index Dividend Yield is the "average of the Annual dividends per share (DPS) of each underlying security in the index as of the report date divided by the price of the security as of the report date."

Distribution Yield is defined in this article:

Also called the “trailing 12-month yield” or “TTM,” this metric is calculated by dividing a fund’s cumulative distributions over the previous 12 months by its net asset value (NAV) at the end of the period. Because this indicator is backward-looking, it doesn’t reflect recent portfolio adjustments or price changes that could affect the fund’s future yield.

  • I don't think that's true. Look at this ETF for instance: there's a 1.25% spread between the distribution and index yield: justetf.com/de-en/…
    – mxk
    Feb 26, 2021 at 6:54
  • Thanks, changed my answer. Feb 27, 2021 at 2:45
  • Thank you -- this helps! So I suppose I will actually have to work it out myself based on the actual payouts I received. That will be difficult because there is tax being withheld by the broker. It is puzzling that they would not include this figure in the fact sheet.
    – mxk
    Feb 27, 2021 at 8:07

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