target-payout fund

target-payout fund

An investment company that distributes a minimum percentage of its assets each year. In years of poor investment performance, a target-payout fund will be required to return to shareholders a portion of their capital since income is unlikely to cover the required payout. These funds are aimed at investors seeking current income.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.