The value of investments can fall as well as rise, and you may get back less than you invested. Past performance is no guarantee of future results.

Redemption yield definition

Redemption yields are also known as the yield-to-maturity or the book yield.

Redemption yield definition

Redemption yields are also known as the yield-to-maturity or the book yield.

The yield represents the expected annual returns from bonds or other fixed-interest securities, in the same way investors calculate expected returns from securities they have purchased using internal rate of return (IRR). The yield is the annual income and anticipated capital gain (or loss) from holding a bond.

The redemption yield of a bond has a relationship with the coupon. If the coupon rate is higher than the yield, the bond is selling at a discount. If the coupon rate is greater than the yield, then it is selling at a premium, and if they are equal then it is selling at par value.

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