YTM
Business & Finance abbreviation · Bond & Fixed-Income
| Stands for | Yield to maturity |
|---|---|
| Categories | Business & Finance |
YTM stands for Yield to maturity, a bond & Fixed-Income abbreviation.
Total annual return an investor would earn by buying a bond at its current price and holding it until maturity, assuming all coupons are reinvested at the same rate. It is the standard way bond yields are quoted and compared.
Example: The 10-year note's YTM rose to 4.3 percent as investors priced in fewer rate cuts.
Usage notes
YTM moves inversely to price: when a bond trades below face value, its YTM exceeds its coupon rate. The calculation assumes no default and reinvestment at the YTM itself, which rarely holds exactly. For callable bonds, investors also check yield to call and yield to worst.
Related abbreviations
More bond & Fixed-Income abbreviations
- AAA – Highest credit rating (triple-A)
- ABS – Asset-backed security
- AT1 – Additional Tier 1 capital
- BTP – Buono del Tesoro Poliennale (Italian multi-year Treasury bond)
- CDO – Collateralized debt obligation
- CDS – Credit default swap
- CDX – Credit default swap index
- CLO – Collateralized loan obligation
- CMBS – Commercial mortgage-backed security
- CMO – Collateralized mortgage obligation
- CoCo – Contingent convertible bond
- CP – Commercial paper