There exist several investment options today where one can invest their money. Some options include uncertainties and risks, but some options are extremely secure, and the return is also good. However, people keep track of their investment money and other profits that they earn adapt a schedule or a plan. They do so within a certain period. Two of such concepts are 1. YTD Return and 2. YTD Yield.
YTD Return vs Yield
The main difference between YTD return and YTD yield is their meaning. The YTD return is the year to date profit and loss that takes place with the money that is invested. On the other hand, the YTD yield is the total year to date income that is gained and returned with the invested amount of money.
The YTD return is the overall calculation of the profit and loss that takes place during a certain amount of time with the entire investment. It helps keep track of the investment and various other updates about it. A stakeholder also acquires the knowledge of their investment whether they have gained profit or suffered a loss.
The YTD yield is the total calculation of the income that is returned and gained with an investment from a certain period till the present date. It is the year-to-date yield that is studied by the stakeholders to gain an income and keep track of it for their invested money.
Comparison Table Between YTD Return and Yield
Parameters Of Comparison | YTD Return | YTD Yield |
Meaning/ Definition | The YTD return is the overall calculation of the profit and loss that takes place during a certain amount of time with the entire investment. | The YTD yield is the total calculation of the income that is returned and gained with an investment from a certain period till the present date. |
Calculation of | The year-to-date profit and loss. | The year-to-date income. |
Further investment decision | Further investment decisions become easier with the help of year-to-date returns. | Further investment decisions do not become easier with the help of year-to-date yield as it only entails the income and thereby does not provide clarity. |
Type | Backward-looking | Forward-looking |
Reflected as | The difference between the holding’s value. | Percentage. |
What is YTD Return?
The overall calculation of the profit and loss that investment has from a certain year to the present date is known as the YTD return or the year to date return. It gives clarity to the stakeholder about their investments, and it also helps a lot to make further investment decisions.
Whenever a stakeholder invests their money by choosing a certain investment option, they either gain profit or suffer loss. However, keeping track of these transactions is one of the important things while investing money. That is where a year to date return plan is important. It helps people in many ways to make their decisions regarding their investments.
Many investors use this plan or stick to this schedule to make a comparison of their investment profit and loss from the previous years and thereby make changes in it. It also helps the investor to make important calls regarding their investments. The entire year to date plan also helps to analyze the transactions.
The year to date return is a backwards-looking strategy to calculate the profits, losses, dividends and also capital gains. The initial investment that is done by the investor can also be compared to the current investment, which gives clarity to the investor if the investment has increased or decreased since then.
What is YTD Yield?
The YTD yield is a year to date yield where the total income that is gained on investment is calculated. A stakeholder holds security on which they gain income through the time of the investment. Various factors are taken into consideration when the total income is calculated that is gained over an investment.
The total income that is gained on investment is expressed in terms of the percentage rate. Various factors like the ongoing market value and/ or the ongoing face value, cost of the investment etc., are taken into consideration while calculating the annual income. It also depends on the security if it is predicted or known as the value of some securities that experience fluctuations.
Various yield options are available for a bond yield depending on the nature of the investment. The bond interest rate is issued by the investor, which is a fixed amount, and that is known as the bond yield. The yield can be withdrawn by the investor before the maturity period of the investment.
There are several benefits of the year to date yield. Investor understands the overall performance of their investment, and they also come to know about their rate of interest, which is the total return that is acquired on the initial investment that is done. It is forward-looking and often less accurate than the return.
Main Differences Between YTD Return and Yield
- The YTD return is the overall calculation of the profit and loss that takes place during a certain amount of time with the entire investment. On the other hand, the YTD yield is the total calculation of the income that is returned and gained with an investment from a certain period till the present date.
- The YTD Return is reflected as the difference between the holding’s value. On the other hand, the YTD revenue is reflected as the percentage rate.
- In the YTD return, the year to date profit and loss is calculated. On the other hand, in the YTD yield, the income is calculated.
- The YTD return is back-looking. On the other hand, the YTD yield is forward-looking.
- The YTD return is more precise. On the other hand, the YTD yield is less accurate.
Conclusion
Both return and yield are an important part of an investment. When an investor calculates the year to the date return, it gives him an idea about the profits and losses that he or she had got during the entire year on his or her investment. Even while calculating the year to date yield, one can get an idea regarding the rate of income he or she can get.
These calculations make it easier for the investor to make further decisions regarding the investment, and it makes the picture clear. It also helps to know various aspects of the invested amount of money. The losses that are suffered on an investment are as important as the profits that are gained. All this information is easier to acquire through such concepts.
Refrences
- https://www.jstor.org/stable/2351740
- https://www.journals.uchicago.edu/doi/abs/10.1086/516389