We use a projected return range rather than a fixed yield to provide maximum transparency to our clients about the varying nature of the actual realised yield as the returns and yields are not guaranteed.
The calculation for the gross projected yield is based on the annualised amortised yield estimate for the portfolio’s holdings.
This gets us to the net adjusted annualised amortised yield.
In calculating the range, during a period of falling interest rates, we calculate the high end of the range using the projected net adjusted yield, and the low end of the range which incorporates the potential future decline in interest rates. When interest rates are seemingly stable, we would use the projected net adjusted yield as the midpoint of the range.
The range is a more accurate reflection of the actual potential realisable yield by the investor, as the underlying securities holdings will fluctuate.