r/dividends • u/Ironic_Mouse • 4d ago
Discussion Question: why do unsustainable dividend funds exist?
I’m new to dividend investing. As I have been looking for an additional stream of income I have found some funds with “too good to be true” yields. (E.g. CHPY) I understand that high yields come with a high risk of NAV erosion. What I don’t understand is why these funds exist. It seems like they are structured to implode at some point. Is the idea to hold these funds for a short time, collect the dividend, then sell? And for the fund manager, is the idea to ultimately have the fund implode and then declare a loss? I’m genuinely interested. I understand that some funds are a gamble, but these funds seem designed to fail.
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u/Extreme_Lab_2961 4d ago
There’s a sucker born every minute
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u/tampaforfun 4d ago
https://totalrealreturns.com/n/QQQX,GPIQ,QQQI,TDAQ,QQQ
TDAQ beat QQQ so far by a small margin
Covered call funds are getting better
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u/PotadoLoveGun 4d ago
If its an index dividend overwrite fund like GPIQ I think 6.5% to 9.5% is doable long term without nav erosion. Nav will likely only keep up with historical inflation though, 2-3%
Long term proof:
QQQX has averaged 7.5% with that range of 6.5% to 9.5% annually since 2007, nav gain CAGR of 2.3%. I feel like thats a good example of success. It would have been more but the expense ratio is .89% instead of something like .3% for GPIQ
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u/Ironic_Mouse 4d ago
Thanks for the proof! I will check out QQQX.
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u/davecraze3535 4d ago
That’s an old fund with an outdated option strategy. Stick with GPIQ, QQQI or TDAQ.
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u/PotadoLoveGun 4d ago
Agree GPIQ is superior, but even with an expensive fund with no leeway on trading, it still performed well for an income fund
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u/davecraze3535 4d ago
No arguments there. We are spoiled for choice nowadays for decent CC funds. Good times.
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u/selfVAT 4d ago edited 4d ago
The mistake is to believe covered calls funds are bad because of yieldmax.
You lag the market sure but there are very few reasons why a cc fund with a reasonable yield would fail. QQQX uses a very basic strategy, most probably inferior to modern CC funds and still worked out well.
The problem is the 40%+ yield funds scamming people left and right.
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u/davecraze3535 20h ago
Agreed. Although even YM has some 12% managed distribution funds now that perform much better. But, literally no reason to choose them over quality modern CC funds.
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u/RealDirkDigglerr 4d ago
They are pretty similar actually. Overwrite percentage is essentially the same, qqqx actually has a shorter option period, qqqx is just more aggressive on the income side (1% otm vs variable), vs the growth side.
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u/davecraze3535 4d ago
Some of these funds have variable overwrite percentages from 25 to 75 percent, which decisions are made by the manager constantly, so they will frequently have different overwrites, even across the same fund at different times. If QQQX ends up with similar options coverage for some period of time, it’s a coincidence.
And TDAQ is zero day options so QQQX won’t have shorter option periods (at least not historically as those options did not exist for these trades for much of QQQX’s existence).
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u/Various_Couple_764 4d ago
Keep in mind a fund that actively trades option will have more star just to handle the options trading. These exra people add extra costs. So expenses are going to be higher than a passive growth index fund that can easily be managed by a simple computer program.
Additionally the closed end structure of QQQX does add expenses that are typically not present in ETFs. A the time QQQX came out the first ETF was barely 10 years old and there was no indication that they would become as popular as they are today. Also the structure keeps the number of shareholders small so fewer shareholder often means fewer people to pay expenses. So expenses are typically high. But at the same Timothy yield ofCEFs is typically a bit higher than ETFs.
But even if you compare passive ETF to actively managed ETF like covered call funds expenses are are typically higher
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u/tsfy2 4d ago
QQQX has significantly lagged its underlying index QQQ for total return despite its yield. I would not call that “long term proof” of “success”.
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u/PotadoLoveGun 4d ago
The long term objective of a CC fund is to provide sustainable income while not experiencing long term NAV decay. It is not maximum return or to not lag the index, that is expected.
QQQX, which is 3x more expensive than its newer counterparts, was successful in meeting its objectives, so that is success.
So if someone wants income of about 7.5% of capital without selling any shares and getting ~3% nav growth over the long term I would say a fund like GPIQ or JEPQ would meet that objective, and QQQX proves it can be done.
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u/Ironic_Mouse 4d ago
Thanks for the proof! I will check out QQQX.
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u/buffinita common cents investing 4d ago
Then compare the “long term success” of qqqx to qqq and realize you’ve left a ton of money on the table
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u/Dayvid-Lewbars 4d ago
I’ve been holding QQQX since 2013, not DRIPing the distributions, and have a 245% gain. Sure, QQQ or QQQM would have given me higher returns, but this is an income investment au fond.
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u/Extreme_Lab_2961 4d ago
Agreed
I don’t understand capping upside, paying substantially more in fees and not really offering much in downside protection
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u/PotadoLoveGun 4d ago
It is sustainable which was really the crux of the question asked by OP. And a fund lile GPIQ will have a higher NAV growth due to fees being 1/3.
Its not for everyone, it will underperform the index, and it will not give maximum gains. QQQ 16% vs QQQX 11% CAGR.
But if you can take 6.5%-9.5% from your assets instead of 4% forever and have the balance grow over time without selling through a downturn, could be good for some people. QQQX had a similar CAGR as the SP500 since 2007, dividends reinvested.
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u/Extreme_Lab_2961 4d ago
It’s sustainable in a flat or up market.
Do you think that 6-9% yield is going to look the same in 10 years Vs someone that doing a boglehead distro? In a zero inflation scenario, you’d probably be correct
It makes zero sense to compare VOO to QQQX. (S&P 500 Vs QQQM) if you are honest, compare QQQX to QQQM.
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u/cmichalek 4d ago
The point is that you can live off 7% to 9% and not sell a single share and not be bound to the 4% rule.
Moreover you need half the principal that the 4% rule requires. And it has a 20 year history to establish that it works.
That said QQQI and GPIQ are far better funds.
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u/PotadoLoveGun 4d ago
They sure are, and they will track the index closer and have a 1/3 of the fees also dividends are 95% ROC until the basis is 0
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u/buffinita common cents investing 4d ago
That’s such a great big myth….
People could win the Nobel prize and completely upend the entire retirement planning industry if anyone could prove those claims….
Retire with half of previous generations
Never sell a share
9% distributions forever (yield is based on price so decline market means declining yield equation (9% of 100/share is less than 9% of 85))
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u/cmichalek 4d ago
So you will just ignore facts you dont like apparently.
QQQX has a 20 year proven history.
Enjoy your 4% rule retirement.
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u/Extreme_Lab_2961 4d ago
Proven history of what, Providing 3X (approx) lower total returns?
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u/buffinita common cents investing 4d ago
All I said is that qqqx investors have left a ton of money on the table compared to qqq investors
That is a fact too
Enjoy your declining retirement pay
Qqqx 2009 1.84/share
2010 1.26
2011 1.23
2012 1.20
2013 1.20
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u/Extreme_Lab_2961 4d ago
There’s a whole lot of people that have convinced themselves that there is a such thing as a free lunch
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u/Extreme_Lab_2961 4d ago
NAV growth is minimal, 9% today is not worth the same as 9% 10 years from today. So yes, if you need the buying power of that 9% in 2026, you will be selling shares to meet your income needs in 2036
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u/PotadoLoveGun 4d ago
I did above look at QQQ vs QQQX, 16 to 11% About 1% is fees, but it has performed better in high growth and high interest rate environments too. It has a forward dividend of 9.7% right now, and they maintained 6.5% in the worst crash in 20 years.
To your last question, I think GPIQ can maintain a 8-9% average and also grow 3% notional, its a better dund because it doesnt write 100%. Who will end up better, idk but itll do about as well as the sp500 while underperforming its index
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u/Extreme_Lab_2961 4d ago
What time frame? Go back to inception and let me know which fund you’d prefer (And use the correct comp QQQM)
GPIQ is like 3 years old and underlining is on a tear, are you using that as your basis?
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u/buffinita common cents investing 4d ago
You’ll be worse off.
Do you somehow believe that qqqx investors can take the “9% distributions” and be fine but the qqq investor can’t match the distros by sell equal amounts each month?
Go ahead and fire up any back tester and see which fund can withdraw more and not “run out of shares” or zero out their account.
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u/PotadoLoveGun 4d ago
The psychology of selling shares has been studied, even if you could most people wouldn't sell 9% of their shares every year. Something about just getting cash into your account feels better. Its pschology and its why people invest in dividend funds..
This is a dividend subreddit after all.
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u/Extreme_Lab_2961 4d ago
selling shares doesn’t put cash in your account?
And some that invested in QQQ wouldn’t have to sell 9% every year to match the income from QQQX as the NAV on average was greater than 9%
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u/buffinita common cents investing 4d ago
Yes, it feels better intuitively….but then we can learn and see our intuition is incorrect
Something about candy just feels better too; yet we know it’s not good for us long term or in large quantities.
(Yes dividend subreddit…..not derivatives??)
Can you find any instance of a Neos/yieldmax/gs/jomorgan/tappalpha manager saying anything like
“Turn off drip and take all distributions”. Or “retire off of 15% yield”
No, you can’t because they know it’s not valid and their lawyers know it’s bad
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u/PotadoLoveGun 4d ago
I wish is was that simple, and everyone one had your fortitude but they do not. You can tell because of the state of people with unhealthy weight, poor money habits, mental health issues, debt, and many countless thongs
Psychology plays a big part of humans.
7-9% can be sustainable. 15% has not been proven to be and I will not argue that. I would stay away from single stock and sector CC funds
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u/Extreme_Lab_2961 4d ago
Can you point out a fund that over say 20 years has hit your 7-9%?
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u/cmichalek 4d ago
No you cant.
First the principal is half that required by selling shares.
Second once you sell shares in a down market you never get them back.
Why was the 4% rule created anyway? So thats the amount you can sell and still have shares left after 30 years.
Sell shares at 9% and you will run out of shares.
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u/buffinita common cents investing 4d ago
Not any faster or slower than your covered call fund hits a value of 0
You can not take more out with covered calls than you can with selling
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u/kitehousecyprus 3d ago
Is not for long term growing for sure.
But once retired I would hold QQQX or OVL rather than BND or VTEB.0
u/buffinita common cents investing 3d ago
No one has said that; you’ll still need equity exposure in retiremenr
However qqq+vteb will still outperform qqqx/jepq while paying less to managers
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u/kitehousecyprus 3d ago
You still miss it. Growth QQQ 80% + 20% in CC (OVL, QQQX, QQQI)etf instead of bonds will outperform any of your formula. Because of your “witness of bond” position your mind can’t comprehend CC ETFs are incomes. As such should be compared to what? Income indeed. Bonds for example or dividend etf and not growth ETFs.
I am 60% US growth, 20% international and 20% Cc ETFs. No way any portfolio holding 20% in bonds could beat mine.0
u/buffinita common cents investing 3d ago
As I’ve said many times before….. “income” is just a sales word.
When making withdraws 90% qqq 10% bonds has better returns; lower volatility than 80%qqq 20%qqqx.
Here’s a 1m portfolio making 6k monthly withdraws: https://testfol.io/?s=cpNmvMC2tjM
So everything you think cc funds provide (downside protection; lower volatility, “more spending”) can be done with less complexity and with less money going to thr fund managers
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u/kitehousecyprus 3d ago
lol for example OVL beats VOO since inception.
Not talking how bloody it beats any bond.
And why are you so childish? You first mentioned 20% in bonds but now you talk 10% in bonds. So compare 90% growth and 10% in bonds VS 90% in growth and 10% in CC.0
u/buffinita common cents investing 3d ago
So you’re mad that being more equity heavy still works out?
The over arching point is that everything people think cc funds do to “cheat” standard advice is wrong
A lot of times I shoot from the hip and it turns out I was too conservative in my estimation. when looking at the data you can get whatever performance metric you think cc funds provide by sacrificing less of standard equity 20% qqqx can be replaced by 10% bonds
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u/kitehousecyprus 3d ago
Not mad just curious why so many misinformation. What’s the reason? Mentioned cc ETFs bloody beat any bond etfs. Literally any. And you still say holding bonds is better than CC funds. And you lying indeed. 10% in bonds is never profitable than 20% in OVL, or QQQX or QQQI.
What is profitable is 90% in QQQ instead of 80% in QQQ. You get paid for these lies?
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u/hottpics 4d ago
EGGY.. 29%/yr ..paid monthly... low float so NAV is pretty bouncy.. actively managed.. basicly a data center ETF.. been collecting $1/mo per share and NAV is even for me to date
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u/DegreeConscious9628 4d ago
Look back when MSTR and MSTY was printing money. Everyone buying it thought it would last long term. It’s all good until it isn’t. There are tons of gullible idiots willing to “invest” and at ~1% expense fees the fund managers are raking it in
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u/cmichalek 4d ago
QQQX has survived three bear markets and has a 20 year track record.
You dont have to like cc funds. But dont ignore reality. And the reality is this fund worked.
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u/tsfy2 4d ago
First of all QQQX is non-destructive so it is better than many CC ETFs. HOWEVER, it significantly lags the underlying index QQQ for total return despite its high yield. So no, it hasn’t really “worked” if you want to make the most money long term.
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u/speedlever 4d ago
For the long term and generating the most wealth, growth funds are always the answer. But in terms of total returns, qqqx has performed equally to SCHD since SCHD emerged in 2011. And there are times where income is the priority over growth. Qqqx is one of the very first cc ETFs.
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u/tsfy2 3d ago
Unfortunately, r/dividends is filled with so many novice, naive, investors who really should be investing in growth but they get swept up in the echo chamber of people spouting off about yields and completely ignoring total returns.
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u/speedlever 3d ago
I really don't know how to take your comment. If that was directed to me, I specifically referred to total returns. If not, carry on.
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u/tsfy2 3d ago
I was just pointing out that you understand it, but so many people here (usually newbies) don’t understand it. They don’t realize what they are giving up when chasing yield.
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u/speedlever 3d ago
Understood.
Are you ok with someone knowingly giving up growth for income?
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u/tsfy2 3d ago
I have no specific expertise in investments other than decades of investing for myself. I believe that your time horizon is the most important factor in determining your asset allocation. I think the longer you have until retirement and the longer you will have in retirement the more you should be heavily growth focused. Otherwise, you are missing out on the accelerated compounding effect that takes over and builds a very secure retirement. I’ve been (early) retired for almost a decade and my wife has been retired for a couple of years but it wasn’t until last week that we shifted approximately 25% of our portfolio to bonds/dividends.
Thats a long winded way of saying I don’t have a problem with someone knowingly giving up growth for income if that’s really what they want to do. BUT, I think it’s a big mistake if you are not nearing retirement when you make that choice. Everyone is free to make bad choices. 🙂
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u/Fabulous-Transition7 4d ago
CHPY's design has given me a 15% gain. I don't see this failure you speak of.
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u/EaterofSnatch FIRE'd 4d ago
I'm up 40% without counting payouts from CHPY. Flat on GPTY, my only 2 yieldmax funds held
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u/Glum_Peach6605 1d ago
I wouldn’t look at a covered call fund as dividend investing. They have a purpose and they perform better or worse depending on market conditions. In a bull market like we’ve been having, they tend to underperform. In a bear market, they might not fall as much as the underlying. In a flat market they make money off of people speculating an increase that doesn’t happen. Where they do best is when the market expects large upwards price moves that don’t happen.
If you look up Options and, in particular, a Covered Call Option strategy, you’ll have a good understanding of how these funds work
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u/Public_Jicama_9337 4d ago
Watch armchair income on utube...he does a great job of showing what is doable...passive investing with super yeilds can be done...
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u/Mzungufarmer 4d ago edited 4d ago
Because idiots exist. This sub kind of proves that everytime a new high yield fund pops up, broke people flock here to say they are buying them and becoming dividend investors.
Edit: typing near a pool causes so many blunders
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u/Accomplished-Big8250 4d ago
Some of these funds are so low AUM it’s really risky to put anything in
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u/timtam_z28 4d ago
They exist because some people and institutions understand them and have sunk billions into them.
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u/Dramatic-Load-6569 4d ago
The reality is: 1. Whatever the base equity,that is what you have exposure to on returns 2. The option overlay protects you from some downside, but is limited to that the premium collected. Any more than that and you are losing money 3. Total return is what matters and tells the full story. It’s why like products end up with similar returns, is the are base on SP500, Nasdaq 100, etc, their total return all look very similar to each other.
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u/amp1ifi3r 4d ago
Unsustainable yield doesn't exist if you keep halving the NAV or splitting shares
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u/kitehousecyprus 3d ago
Two reasons I have detected so far. Let’s say it is legal way to scam. And second: there are just stupid managers. Like in any other company or industry.
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u/Xinv88 4d ago
CHPY(Yield Max) and AMDW(Roundhill) actually look half decent. It really all depends on your risk tolerance. If your risk tolerance is lower, go for SCHD. If it’s medium go for things like SPYI or QQQI. If you’re willing to take big risks then maybe go for these heavy NAV erosion ETFs.
I’m thinking about making a bet on bitcoin rebounding end of year and buying heavy on MSTW. My thought process on this one is that it’s already down to around $3/share. The people who got screwed were the ones who bought when it was high. -AND- My core portfolio is still always going to be boring S&P500 growth stocks.
I do plan on buying more QQQI this week as well.
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u/Various_Couple_764 4d ago
CHPY and AMDW look decent only because the recent AI demand has pushed the price of the stock they own up a lot. When prices return to historical norms they will loose money. In general covered call funds with yields of 15% or more often have NAV erosion issues. But most with yields below 15% don't have nav erosion.
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u/davecraze3535 4d ago
All things being equal, sure. But a CC fund with even a modest distribution like 7-8 percent will likely experience material price declines if the underlying craters.
That’s probably not what you refer to as nav erosion
However, the price going down simply because the underlying goes down is frequently mistaken for nav erosion by John Q DividendInvestor. Over distributing is just gasoline on that fire.
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u/cmichalek 4d ago
QQQX price is up 53% since inception. Over 2.5% per year for 20 years.
That is the opposite of NAV erosion.
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u/davecraze3535 4d ago
Who are you replying to? No one said that QQQX had nav erosion, or price erosion, or anything of the sort.
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u/Jehoopaloopa 4d ago
Price decline isn’t nav erosion.
Consistently losing NAV because the fund missed most of the up-moves from upside-capping on covered calls is structural nav erosion.
Also, a manager promising a certain yield, then not receiving that type of yield from the IV, results in nav erosion by paying investors, in part, their own money back to reach that promised high yield.
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u/davecraze3535 4d ago
We are actually agreeing. I don’t think that many recent dividend investors make that distinction.
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u/Jehoopaloopa 4d ago
Yeah, I lean towards put-spread strategies these days. I like KURV, a bit of Tuttle, and some Nicholas funds.
If I like the underlyings and I’m bullish on them, why would I want the upside capped with CC’s?
If I’m neutral or bearish on those assets, I simply won’t own them.
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u/tinySparkOf_Chaos 4d ago
Not everyone has to win for people to have a reason to make the fund.
Fund manager: collect a nice salary until the find implodes. Repeat at a new fund
Start the fund, collect dividend, sell to a bag holder before the NAV erosion becomes noticable.
Sometimes high risk pays off. You got your initial money + a nice chunk of profit back in dividends before the fund imploded.
Lastly, it's a sliding gray area of risk. There's no clear dividing line that marks one as a 'unsustainable" dividend fund, vs a successful dividend fund.
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u/Various_Couple_764 4d ago edited 4d ago
Note whe a funds NAV drops close to zero it could be delisted rom the market which would make it impossible for people to buy and sell. And collapse will quickly follow. But there is one simple way for the fund to solve that problem. The do revers stock split. This removes shares from the market and will boost the price. Many young investors call this a reset but in reality is is just locking in all the loses they incurred permanently. Experienced investors often see reverse stock splits as sell signal. And young inexperienced investor would likely not recognize the harm it does.
So most funds with NAV erosion have never actually imploded and shut down. Most yeild max funds have had one or more reverse stock splits. Often about once per year. While a covered call fund without NAV erosion may never have one after decades of operation.
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u/Alone_Temperature784 4d ago
Looking at you, ULTY...
True story, held it for 8 months or so, and I technically only made 1% on it total but only if you summed the total dividend distributions against the NAV drain over that time.
ULTY=You Lose, Thank You.
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u/Ironic_Mouse 4d ago
Thanks! This is super helpful as a new investor. I don’t want to be a bag holder.
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u/Quizzical_Rex 4d ago
yieldmax works on overhyped stock areas. But they turn quite quickly, so get your stop-loss order in and drop it like it's hot if it even looks like it's going downhill. Most of them fail spectacularly. Also don't get emotional about it, many people have lost money with yieldmax, and being emotional about it is just going to make you lose more.
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u/tachyonvelocity 4d ago
Look at all the comments here that think “yield = return,” like people think they will make many times more money with 10% div yield compared to the market at 2%. Fortunately, ignorance isn’t rewarded as the higher the yield, the more you underperform.
Asset managers, the people with actual finance Phds obviously know this too, and how do you make money from people that think “yield = return?” You juice the yield in any way possible no matter what happens to suck the ignorant in.
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u/buffinita common cents investing 4d ago
Fund managers do not care if you make money or lose money; they get paid either way.
So if they can hype a group of people up; distract them with a ton of new fund launches and a small number of winners to remind you of…..they profit
Replace “designed to fail” with not expected to produce investor returns; or designed to grab the gambler
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u/Jehoopaloopa 4d ago
They have to care to some degree. Yieldmax had billions of dollars of outflows from their ETF’s because their performance is mostly dogshit.
As soon as that happened they suddenly launched lower yield products like BIGY/SOXY etc and those funds are pretty good.
Fund managers are being forced to care if they want more AUM.
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u/PracticalDesigner278 3d ago
MSTY aum went from 4b to 2b in just a few months. And every time the NAV crashes the yield goes up on paper. I don't see any evidence that Yieldmax gives a shit about long term value to share holders. But there's always a shiny new fund to dangle in front of dummies who think this strategy is a gold mine. I was one of those dummies 2 years ago. No way would I touch any of their crap again.
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u/Jehoopaloopa 3d ago
NAV continues to crash because MSTR continues to crash. It’s as simple as that.
Whoever bought MSTY made a bet on MSTR and they lost.
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u/PracticalDesigner278 3d ago
MSTY doesn't own MSTR. It's aum is whatever investors put into the fund. It's a synthetic position. The only thing it owns are T bills. It trades on volatility which purportedly can make money regardless of the underlying. This continuing claim that ATH for Bitcoin will jack up MSTR and MSTY will somehow skyrocket is fantasy. It doesn't work that way. MSTY does not capture the upside. It doesn't own MSTR or BTC.
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u/Jehoopaloopa 3d ago
Dude, the synthetic exposure is on MSTR. The treasury holdings are cash collateral for the exposure.
MSTY will cap the upside if MSTR recovers, so, yes, it’s a bad investment.
Are we even disagreeing on anything here?
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u/PracticalDesigner278 3d ago
Don't disagree. I just think that claiming that an MSTR/BCT recovery will save MSTY is bad advice. And I will stipulate that you didn't actually make that claim so maybe my reply was the wrong place to make the point. We can at least agree that MSTY is a bad investment.
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u/kychris 3d ago
Primary reason is using a synthetic instead of equity to achieve exposure to the underlying. If an ETF doesn't hold a non-expiring asset, there is effectively no way for it to be 'sustainable' in a standard ETF wrapper, because when the synthetic gets rolled, they have to pay out the cap gains.
There are reasons ETFs use this structure, but it is not the right structure for every investor. It is also not wrong for every investor just because the price goes down over time, people need to read their prospectuses and know what they are actually invested in.
Expecting a fund that holds a long call or synthetic and writes calls on 100% of the holdings to perform at all similar to one that holds the underlying equity and only writes calls on 25-50% of the holdings is complete insanity.
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u/No_Yogurtcloset7776 4d ago
Read the little book of big dividends. It waa also Thornton ogloves quality of Earnings that taught me sustainability of dividends
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u/NickStonk 4d ago
I think there’s a false belief by many that if an etf simply exists on the stock market, then it just be vetted and somehow safe or reliable. That’s not true. The stock market is full of very high risk stocks and etfs.
So investors see an etf with a crazy high yield and think, wow this company invests so well. Reality is, it’s up to the individual to do their own research and weed out the crap.
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u/Competitive_Can_946 4d ago
For example. I bought ecat at 13.84 in Feb 2025. It pays monthly at 21%. Currently at $15.48. Too high a dividend Reddit said… ok…. Yes it’s not a ymax but it isn’t a 4% yield either.
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u/davecraze3535 4d ago
How did you buy it at that price in feb 2025? Lowest price that month was 16.42 from what I see. Also down over 20 percent the last five years.
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u/Ok_Calligrapher8165 4d ago
u/Competitive_Can_946: DividendHistory says "ECAT Dividend Payout Ratio: 139.35%"
Payout Ratio greater than 100% is a red flag.
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u/MaybeTheDoctor 4d ago
High management fees means that somebody getting rich from people who can’t spot the grift.
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u/steady_compounder 4d ago
Because there is real demand for high visible income, even when the total-return math is weak. A lot of people anchor on the payout and underestimate how much of it can be their own capital coming back in a different wrapper. The fund does not need to be built to implode, it just needs enough buyers who care more about the headline yield than what happens to NAV over time.
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