# 1.6.10 Free cash flow yield

Free cash flow yield is computed as the ratio of free cash flow to the initial value of the asset. It ignores capital gains. The index-level yield is calculated as the weighted average using the fair value of each constituent.

where:

denotes the free cash flow of constituent *i* at time *t* expressed in the index reporting currency.

denotes constituent *i*'s fair value estimate at time *t-1* expressed in the index reporting currency.

denotes the weight of constituent *i* at time *t-1.*