Yield to Maturity on WebNotes

How to interpret mutual fund yield-to-maturity (YTM)

Tue, 19 May 2026 00:00:00 +0000

MF YTM is the most important debt-fund metric for estimating near-term return. Higher YTM isn’t always better; the path to higher YTM (duration or credit) matters.

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Step-by-step procedure

See the procedure infobox above for the six steps.

Yield to Maturity (YTM) in debt mutual funds

Mon, 18 May 2026 00:00:00 +0000

Yield to Maturity (YTM) is the expected annualised return on a debt mutual fund if all bonds in the portfolio are held to maturity. It is one of the most-used metrics for evaluating debt fund expected returns and is reported in monthly factsheets by all major AMCs.

Calculation

For a bond:

YTM is the discount rate that equates the present value of future cash flows to the current bond price.

For a debt mutual fund:

Yield to maturity for debt mutual funds

Tue, 12 May 2026 00:00:00 +0000

Yield to maturity (YTM) of a debt mutual fund is the weighted average internal rate of return (IRR) of all the bonds held in the portfolio, assuming each bond is held until maturity, all coupon payments are received on schedule, and all principal amounts are repaid in full. It represents the pre-expense annual return the portfolio is expected to generate, expressed as a percentage per annum. YTM is a forward-looking expected return estimate, not a historical return.