What is a Total Return Spending Policy?
Rather than setting spending from the fund at the amount of interest and dividends received for a period of time, a Total Return Spending Policy establishes a percentage of the total fund as the amount available for spending. Generally the percentage is 3.5% -5% of the 3-year (or 5 –year) rolling average market value of the fund. The market value of the fund includes principal, interest earned, capital appreciation and/or capital depreciation over the period. For more information on Total Return and how it might be appropriate for one or more of your funds, contact us.
Rather than setting spending from the fund at the amount of interest and dividends received for a period of time, a Total Return Spending Policy establishes a percentage of the total fund as the amount available for spending. Generally the percentage is 3.5% -5% of the 3-year (or 5 – year) rolling average market value of the fund. The market value of the fund includes principal, interest earned, capital appreciation and/or capital depreciation over the period. For more information on Total Return and how it might be appropriate for one or more of your funds, contact us.
