Subscriber Question:
Should I consider a fund’s yield or its total return?
NoLoad FundX answer:
When selecting funds, we focus on total return which measures how a fund has performed, including both the gain (or loss) in share value, plus all income the fund distributed — whether the distribution was reinvested to buy more shares or taken in cash.
Yield measures the amount of income a fund generates as a percentage of its net asset value (NAV). We don’t suggest choosing funds solely based on yield because some funds with higher yields may not have as good performance as other funds, or the fund may take on more risk to achieve that yield.
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How can you determine a ETF’s PE ratio. If for example QQQ is trading at 25X it’s PE how is this determined?
The p/e of a fund is really just the average p/e of the underlying holdings.