Although the 30-day yield has its limitations, the distribution yield can very easily magnify larger- or smaller-than-normal payments that don't come close to reflecting the actual payments over the period it's meant to represent. Many investors still value the distribution yield as a metric, and you should still pay attention to it. However, understand it's not standardized like the 30-day yield, so you really need to know how each bond fund is calculating this metric.
How to calculate a 30-day yield
The 30-day yield is a highly standardized metric, which makes it easy to calculate for any investor interested in buying into a bond fund. There are four pieces of information you'll need:
I = interests and dividends received over the last 30-day period
E = accrued expenses over the last 30-day period minus reimbursements
S = the average number of shares outstanding daily that were entitled to distributions
P = the maximum price per share on the last day of the 30-day period
When it's put into a formula, it looks like this:
30-day yield = 2 x ((( I - E ) / ( S x P ) + 1 ) ^6 - 1