Banking

Cash Flow Return In Multi-Asset Portfolios

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Executive Summary

Investment returns are transmitted to investors through cash flow and valuation changes. Cash flows include regular contractual payments, such as interest and amortization or sinking fund payments on asset types composed of debt instruments. Stock dividends are similar, but are not contractual and are offered on only a portion of the stock universe. Some asset types offer irregular or unscheduled cash flows in the form of return of principal (i.e., corporate bond calls, MBS prepays) or capital (i.e., private equity funds). Commercial real estate cash flows are comprised of net operating income of properties.

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