PVD of Cash Flows

pupdawg82

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Does anyone have a shorter and easier way to explain Present Value of Distributions of Cash Flows?
I am finding it hard to explain and present.
 
Not sure how short you’re looking for, but here is what I have in my notes:
PVD
-Measures proportion of index’s total duration attributable to cash flows falling within selected periods
-Describes how total duration is distributed across maturity
-If manager can mimic PVD, portfolio will have same sensitivities as benchmark
Once you know all that, the actual steps taken are pretty intuitive.
 
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