What is a good gross yield?

TheProfessional

Hi all

I have a little bit of money that has built up via investing £150 monthly on CSD in a Stocks and Shares ISA buying just VLS80.

I had an annual report which says the gross yield is 1.6% 

When I look at the numbers it says the tax cost is £8k and the increase is £2k and it shows the obvious increase at 25%

I can't understand the differences between these numbers?

Thanks for any pointers

eskbanker

Yield is the income generated from the investment, typically in dividend form.

Not sure what you mean by 'tax cost' but your description of £8K rising by 25% (£2K) sounds like the capital growth.

In other words, if you invested £8K, you'll have received 1.6% of £8K as dividends (if held for the whole year, drip-feeding will give a different result), but the value of the investment is now £10K.

In terms of the question posed in the title, as opposed to the body of the post, the norm is to consider the total return on an investment, rather than arbitrarily segregating income and capital growth....

TheProfessional

Ah thanks eskbanker.

The report uses the term 'tax cost' and I think that is the amount I have put in to the ISA. The next column is 'market value' which is a higher value.

I think I forgot the funds reinvest the dividends as when I log I just look at the capital growth which is the ~25% figure.

Thanks again

VXman

Vanguard themselves put growth at 28% for the year to April 2021 and yield at 1.34%

https://www.vanguardinvestor.co.uk/investments/vanguard-lifestrategy-80-equity-fund-accumulation-shares/price-performance