Return of capital, constructive or destructive

Definition

Older shorthand for reading the return-of-capital share beside one-year total return. The tax label does not show whether a payout was earned: funds that write index options under Section 1256 can report most of a distribution as return of capital while NAV grows, and a fund can report none while paying the holder's own capital back. The desk now judges the payout by Yield Sustainability, which compares what the fund earned with what it paid.