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Raising investor awareness
Income funds have multiplied faster than anybody can read them, and the number they compete on is the one most likely to mislead you. This site exists to tell income that is being earned apart from income that is being paid out of a fund's own capital.
Two minutes, and it walks the ranking with you.
Option-income funds arrived and the shortlist stopped being short: covered-call and put-writing ETFs on single stocks, on indices, on crypto proxies, launched faster than anyone can assess them. The screeners answered the flood the only way a screener can — by sorting on the biggest number available, which is the yield.
We have no opinion↑
That is the design, not modesty. There is no analyst here and no view on where the market is going. Every figure comes from three things the instruments themselves produce — the daily close, the distributions actually paid, and the dates they were paid on — and from those, arithmetic alone shows whether a payment was funded by returns or by capital.
Nothing here is an accusation either. A fund distributing more than it earns is not necessarily doing anything improper, and a headline yield is not a lie — it is arithmetic answering a question that is not the one you are asking. Our job is to put the other questions on the same screen.
NAV erosion↑
A fund can only pay what it earns, plus whatever it takes from its own capital. When the second becomes routine the price drifts down and keeps drifting: the fund is returning your own money and calling it income. That is NAV erosion.
It hides well, because a distribution rate is a fraction and both halves move. A fund whose price has halved reports twice the yield on the same payment — so as the capital disappears the advertised number goes UP, and the worst cases climb to the top of a screener sorted by yield. Many of these funds also pay a share of net asset value, so the payment falls WITH the price: less capital, and less income for it. A fund down 80% must rise 400% to get back, while paying out.
That is not a prediction. Sorting every fund we track by what it advertises, and asking what its price did over the following year:
| Advertised income rate | Funds | Avg price change (1y) | Losing capital |
|---|---|---|---|
| 50% or more | 52 | −44.1% | 49 of 52 |
| 30% to 50% | 33 | −25.1% | 31 of 33 |
| 20% to 30% | 31 | −26.4% | 29 of 31 |
| 10% to 20% | 112 | −2.1% | 63 of 112 |
| under 10% | 448 | −1.2% | 343 of 448 |
676 funds, measured on 1 September 2026. We track US-listed ETFs and dividend stocks paying 5% or more when we add them, monthly or weekly; a fund without a full year of price history is not in this table.
The funds advertising 50% or more lost an average of 44.1% of their price in a year, and 49 of the 52 lost capital. The band below lost a quarter. The funds paying under 10% barely moved — down 1.2%, which is a normal year.
The price is the honest denominator, deliberately. An income investor generally SPENDS the distributions — that is the point of holding the fund — so the capital they still own is what the price says it is. Anyone content to reinvest everything has a simpler option: a growth fund, which is built for exactly that and charges no income premium for it.
Single-stock ETFs↑
A single-stock ETF writes options over ONE company. They are legitimate products, clearly labelled — and structurally the largest contributor to the erosion above, which is why the ranking tints their ticker red rather than leaving a reader to work it out.
A fund holding one company has none of the averaging that makes a basket survivable. When the underlying rises it pays generously out of the premium; when it falls the fund falls harder, and the option income that looked like a reward on the way up caps the recovery on the way back. The distributions then finish the job — paying at an elevated rate out of impaired capital spends the very thing that would have to compound. The underlying company can recover completely and the fund tracking it may never return to where it started.
| Single-stock | Everything else | |
|---|---|---|
| Funds tracked | 102 | 772 |
| Avg advertised income rate | 57.2% | 10.8% |
| Avg price change (1y) | −36.4% | −4.1% |
| Avg worst-ever drawdown | 65.4% | 30.1% |
| Avg still below its own high | 59.8% | 21.5% |
| At least half below its high | 58 of 102 | 96 of 772 |
Measured on 1 September 2026. "Below its own high" is how far under its best-ever price a fund currently sits.
Five times the advertised income, nine times the price decline. The income is real; it is being paid out of a capital base that is not coming back. Somebody who wants a company's move can usually buy the COMPANY — the option writing is what sells that upside away. It is a reasonable trade to make deliberately and a poor one to make by accident, because the yield was the largest number on the screen.
Income Rate↑
If erosion is the disease, the yield figure is the symptom that gets misread. There are two standard ways to state what a fund pays, and each has a hole an eroding fund falls straight through.
Distribution Rate takes the latest payment, multiplies by how often the fund pays, and divides by today's price. Useful — what would I receive if I bought now and this continued? — but it rests on ONE payment, so an unusually large distribution doubles the headline.
Dividend Yield TTM adds up twelve months of payments over today's price. That fixes the single-payment problem and creates two worse ones: when the price collapses, old payments divided by the new smaller number make the figure RISE as the capital falls — several hundred per cent on a fund that has lost most of its value — and a fund six months old has only six months to add up, so it reads as roughly half of what it pays. The newest funds are the ones it describes worst.
Income Rate divides each payment by the price on the day THAT payment went ex — the price a holder actually paid to receive it — averages those, and annualizes by cadence. One outsized payment is one value among twelve or fifty-two, and a collapsed price can no longer inflate the figure, because old payments are still measured against the old prices they were paid at. On 1 September 2026, 18 of 868 funds showed a trailing yield more than double their Income Rate — the worst reporting 549%.
A fund too young to have a year of payments has nothing to average, so for those the Income Rate is the forward figure instead. On 1 September 2026 that was three of 874 funds.
The four pillars↑
Each fund is scored on four independent pillars, each a weighted sum of several measurements, combined into one 0–100 composite. They can offset each other — which is why a fund whose capital preservation is collapsing while its income improves can show a composite that barely moves, and why all four are published.
- Income — how much the fund pays, how reliably, and whether the payment is trending up or down.
- Capital Preservation — what has happened to the capital underneath. The pillar that catches a fund paying its distribution out of its own NAV.
- Risk-Adjusted Returns — return per unit of the risk taken to get it: Sharpe, Sortino, Omega, and how consistent the returns have been.
- Fund Structure — the fund as a vehicle rather than as an investment: what it costs to hold, how large it is, and how easily it can be traded.
The ingredients are listed; the proportions deliberately are not. Weights belong to a scoring PROFILE, and a profile is versioned so it can be improved — publishing today's numbers as though they were the method would make every future improvement look like a change of story.
Each of those measurements is defined in the glossary, which says what every parameter is and, where it matters, how this site computes it — the same words that sit behind the question mark beside each figure on a fund.
The signal, and its strength↑
The score says how a fund compares; the signal says what its PRICE is doing. They are separate on purpose — a fund can score well and be falling, and a reader is owed both facts rather than one number that has blended them. A fund reads BUY when its price sits a full band above its long-term average with the shorter averages stacked above the longer ones, SELL when it has fallen the same distance below, and HOLD in between, which is most funds most of the time. The band is measured in the fund's OWN volatility, because a 5% move is a quiet week for one fund and an event for another.
Two rules stop it flapping and stop it misleading. A signal must hold for more than one session before it is published, and the level it must reach to CHANGE is further than the level it must hold to stay. And a BUY is vetoed to HOLD when Capital Preservation is low: a fund whose capital is eroding is not something this site will call a buy, however well its price is behaving. The veto does not force a SELL — too damaged to recommend and worth selling are different claims. Signal strength runs from −1 to +1 and is what the label is banded FROM, so twenty funds all reading BUY can still be ordered.
None of this is investment advice, and a score is not a recommendation. It is a summary of what the numbers have done. Always do your own due diligence before making an investment decision.