Distribution Runway
Also written runway.
Years NAV could fund a fixed dollar payment at the trailing 12-month pace. Not a forecast.
Definition
The years a fund's NAV could keep funding a payment fixed in dollars at the trailing pace. A fixed payment takes a larger share of NAV as NAV falls, so the decline speeds up. Sponsors usually cut a fixed payment long before NAV runs out; the runway describes the pressure toward that cut, not a date.
Definitions describe how YieldDesk reads the term. Nothing on this page is investment advice or a recommendation to buy, sell or hold.