Interactive Tool
Distribution Quality Lab
Help advisors explain why a high distribution is not automatically a high-quality return.Quality readIncome supportedThe payout is broadly supported by income and gains in this controlled example.
Payout coverage104.2%Earned income plus realized gains divided by distribution.
Return of capital share0%Capital component as a share of the stated distribution.
Earned income6.8%
Realized gains0.7%
Return of capital0%
NAV change0.4%
Document checks
- Compare declared distribution rate with net investment income and realized gains.
- Look for return-of-capital language in tax character or 19a notices.
- Read NAV trend beside the payout rate before calling the yield durable.
- Use the source trail: Statement of operations + distribution declaration.
Client-safe language
A high distribution is not automatically a high return. First ask what funded the payout, whether NAV was stable, and which document proves the character.
Quality readMixed supportThe payout is partly supported, but the capital component and NAV drift need explanation.
Payout coverage82.5%Earned income plus realized gains divided by distribution.
Return of capital share17.5%Capital component as a share of the stated distribution.
Earned income4.9%
Realized gains1.7%
Return of capital1.4%
NAV change-0.8%
Document checks
- Compare declared distribution rate with net investment income and realized gains.
- Look for return-of-capital language in tax character or 19a notices.
- Read NAV trend beside the payout rate before calling the yield durable.
- Use the source trail: Shareholder report + tax character note.
Client-safe language
A high distribution is not automatically a high return. First ask what funded the payout, whether NAV was stable, and which document proves the character.
Quality readCapital supportThe payout rate is doing more marketing work than economic work; inspect sustainability before quoting yield.
Payout coverage42%Earned income plus realized gains divided by distribution.
Return of capital share58%Capital component as a share of the stated distribution.
Earned income3.8%
Realized gains0.4%
Return of capital5.8%
NAV change-3.2%
Document checks
- Compare declared distribution rate with net investment income and realized gains.
- Look for return-of-capital language in tax character or 19a notices.
- Read NAV trend beside the payout rate before calling the yield durable.
- Use the source trail: 19a notice + NAV bridge + shareholder report.
Client-safe language
A high distribution is not automatically a high return. First ask what funded the payout, whether NAV was stable, and which document proves the character.
Operating-system handoffUse the lab, then route into concepts, controlled examples, document checks, and advisor language.
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