Issue link: https://info.seic.com/i/1429130
5 Smart distributions make the most of your DFS investment. The way your distributions are sourced can have a big impact on performance over time. With DFS, distributions are first funded with the income generated by your investments— primarily dividends, interest payments, and capital gains distributions. If the income is not enough to meet your target, a portion of your principal will be sold to help achieve that goal. When principal is sold, the first assets targeted are those with overweighted positions. This would include assets that have appreciated in price to the point where they now represent a larger-than- desired percentage of your portfolio. In this way, you avoid selling assets that are under stress, and focus instead on selling assets that have met or exceeded their price targets. For greater tax efficiency, assets with capital losses would also be targeted when principal is needed to fund your distributions. Investments with embedded long-term capital gains would be sold only as a last resort, as would assets in underweighted parts of your portfolio. Keeping your options open. Knowing that the future can hold unexpected changes, we've designed your DFS portfolio for maximum flexibility. With DFS, your money remains yours. You can increase, reduce, or stop your distributions as your needs change, and you are free to redeem your shares without penalty at any time. Growth is also an objective, so when the time comes, any remaining assets can be passed on to your heirs, allowing you to leave a legacy to the people and organizations you care most about. Investment income • Dividends, interest payments, and capital gains Overweight positions • This avoids selling assets that are under stress Assets with capital loss • Improve tax efficiency Embedded capital gains & underweight positions • Sold only as a last resort Distribution source order