Realised Yield in 2025: A Guide for Australian Investors

As Australia’s investment landscape evolves in 2025, investors are looking beyond headline returns and digging into what really matters: realised yield. Whether you’re building a share portfolio, holding bonds, or weighing property investments, understanding realised yield can sharpen your financial decisions and help you cut through the noise.

What Is Realised Yield?

Realised yield refers to the actual income or return an investor has received from an investment, as opposed to potential or projected returns. Unlike the advertised yield or ‘promised’ yield, which is based on assumptions or forward-looking statements, realised yield is what you’ve genuinely pocketed. This makes it a more reliable measure of an investment’s performance, especially in volatile or uncertain markets.

For example, if you buy a bond with a 4% annual coupon but sell it after six months, your realised yield will depend on the interest you actually received and any capital gains or losses from the sale. Similarly, for shares, it’s the dividends you’ve actually collected plus any gains (or losses) from selling the shares, divided by your initial investment.

• Shares: Realised yield = (Dividends received + realised capital gains) / initial investment
• Bonds: Realised yield = (Interest payments + capital gains/losses) / initial investment
• Property: Realised yield = (Rental income received + capital gains/losses on sale) / initial investment

In 2025, as market volatility persists and the RBA’s interest rate path remains a moving target, focusing on realised yield rather than projections can help investors avoid overestimating their true returns.

Why Realised Yield Matters in 2025

This year, several trends make realised yield especially important for Australian investors:

• Higher Interest Rates: The RBA’s tighter policy has led to higher yields on cash and fixed-income products, but also more volatility in prices. Realised yield cuts through the noise by showing what investors are actually earning after market swings.
• Tax Changes: The Federal Budget 2024/25 included adjustments to capital gains tax (CGT) and franking credits. Realised yield calculations must now factor in these after-tax outcomes, which can differ markedly from headline returns.
• Rise of Short-Term Investing: More Australians are trading shares and ETFs more frequently, making realised yield—rather than projected annual returns—a more relevant measure of success.

For example, suppose you invested $10,000 in an ASX-listed ETF in January 2024 and sold it in January 2025 after receiving $400 in dividends and $600 in capital gains. Your realised yield is ($400 + $600) / $10,000 = 10%, before tax. If you’re in the 37% marginal tax bracket and some of the dividends are unfranked, your after-tax realised yield may be considerably lower. This is the real-world return that matters when comparing investment options.

How to Calculate and Use Realised Yield

To accurately track realised yield, Australian investors should:

1. Keep Detailed Records: Document all income (dividends, interest, rent) and realised capital gains or losses. Many platforms now provide end-of-year summaries.
2. Factor in Transaction Costs: Brokerage fees, management costs, and taxes all reduce your true realised yield.
3. Compare Like-for-Like: When evaluating different assets, always compare realised yields after fees and tax. For example, a term deposit’s realised yield is lower than its advertised rate if you withdraw early and pay a break fee.
4. Review Regularly: Markets move and so do your yields. A quarterly or annual check-in can help you spot underperforming assets before they drag down your portfolio.

It’s also important to distinguish realised yield from unrealised gains. Unrealised gains are ‘on paper’—they can vanish in a downturn. Realised yield, by contrast, is cash in your pocket or bank account.

Case Study: Realised Yield in Action

Consider the case of an investor who bought $20,000 of Commonwealth Bank shares in early 2023. Over 18 months, they received $1,200 in fully franked dividends and sold the shares in mid-2024 for $22,000. Their realised yield is (($1,200 + $2,000) / $20,000) = 16%. After accounting for brokerage fees and the impact of franking credits (which may now be capped for some investors under 2025 policy changes), the after-tax realised yield could be closer to 12%.

This figure is far more useful for planning and comparison than simply looking at the share price chart or annualised returns quoted by the fund manager.

The Bottom Line: Making Realised Yield Work for You

In 2025, with investment choices proliferating and markets in flux, realised yield has become the gold standard for assessing real returns. By focusing on the income and gains you actually receive—and factoring in all costs and taxes—you’ll gain a clearer picture of how your money is working for you. Whether you’re managing your own portfolio or working with an adviser, keeping an eye on realised yield is one of the smartest moves you can make this year.