What is Yield to Maturity (YTM)?
Yield to Maturity is the rate of return on a T-bill investment, assuming the position is held until maturity. It takes into account the price paid and the holding period of the investment, and it shows the rate of return as an annualized rate.
Yield to Maturity is the rate of return on a T-bill investment, assuming the position is held until maturity. It takes into account the price paid and the holding period of the investment, and it shows the rate of return as an annualized rate.
When comparing yields, it’s important to note that there are different methods for calculating YTM. Jiko uses a compound annual growth rate (CAGR) formula with the actual day count (365 days, 366 in leap years). Other commonly used calculation methods are the Discount Yield method and Bond Equivalent Yield method. When comparing yields across different sources, it is important to make sure they are using the same formula to calculate yield.
Unless otherwise stated, Jiko calculates Yield to Maturity before fees. Any fees assessed will reduce the realized yield.