Distribution Coverage

Distribution coverage is a comparison between a fund’s distribution and the income, gains, or other measure stated as funding it.

Why this matters to income investors

Comparing distributions with the stated earnings or cash measure helps assess whether the payment is funded.

How to use distribution coverage in your research

Compare the cash distribution with the fund’s reported income, gains, and net asset value over several periods. Check the source and sustainability of the payment rather than relying on its quoted rate.

This material is general education and information, not individualized investment, tax, or legal advice.