Confused about SEC Yield on VFSUX

[Lsbcal]

Here is a link to the daily yield information for Vanguard funds:

https://personal.vanguard.com/us/funds/tools/pricehistorysearch?radio=1&results=get&FundType=VanguardFunds&FundIntExt=INT&FundId=0539&Sc=1&fundName=0539&fundValue=0539&radiobutton2=1&beginDate=01%2F01%2F2022&endDate=10%2F11%2F2022&year=#res

So you can see the rise of the SEC yield for VFSUX over a year's time. You can see the gradual rise.

 

[Lsbcal]

"The SEC yield, also referred to as the standardized yield, is a computation that allows comparison of bond funds that fall under the jurisdiction of the Securities and Exchange Commission (SEC). It assumes that an investor holds each bond in a portfolio to maturity, the SEC yield is used to estimate the yield an investor can expect to receive based on historical returns. Moreover, the yield follows an assumption that the income made will be reinvested, and it also accounts for expenses and fees."

The assumption that a bond fund will hold a security to maturity is not even realistic. Bond fund are in a buy high and sell low mode and are selling securities at a loss. The SEC yield is an inflated number in a rising rate environment. Distribution yields are what you actually earn.

Why is SEC yield an inflated number in a rising rate environment? It seems to me that it is a decent way to compare among similar types of bond funds.

Also, you earn the distribution yield + the capital gains (loss). I track this data monthly as a bond fund comparison. Currently I do not own VFSUX or any bond funds but might be a buyer in the future.