Estimating Net Cash Flows

Given the beginning net asset ending net assets, a net cash flow is estimated by stripping out two types of activities. One is natural growth of the assets due to capital market movements. The other is reinvestment of the capital gains and dividends distributions that occur during the calculation month.

4Calculation

CFt  = net cash flows for month t

NAt-1 = beginning of the month total net assets

NAt = end of the month total net assets

rt  = monthly return for month t

CFt  = NAt - NAt-1 * (1+rt)