Why is VTC yield less than the 3 funds it is made of?

[ocotillo711]

VTC is made up of the following:

VCLT with an SEC yield of 4.78%
VCIT with an SEC yield of 4.48%
VCSH with an SEC yield of 3.95%

So why is VTC's SEC yield so low at 2.69% ?

Shouldn't it be a blend of the above yields, so much higher than 2.69%?

[Corvidae]

Just a guess, but because it is an ETF of ETFs, that's probably more like the distribution yield than the SEC yield on a typical bond fund. So it's probably based on the distributions of the underlying ETFs rather than the bonds in those underlying funds.

[jeffyscott]

Yep, it's treated like a stock fund for purposes of calculating the SEC yield. It makes no sense, but that's what they do. You can confirm this by reading/comparing the Vanguard footnote for the SEC yield on each fund's web page.