Two of the market's most popular income ETFs compared side-by-side. See which one fits your yield strategy.
What this means: Both CSWC and FDUS fall intoTier 3: Specialty. This suggests they share a similar risk profile and volatility expectation.
| Metric | CSWC | FDUS |
|---|---|---|
| Total Return (1Y) | 3.72% | -4.74% |
| NAV Change (1Y) | -0.60% | -15.11% |
| Max Drawdown | -24.44% | -25.79% |
| Beta | - | - |
* Returns include dividend reinvestment. Drawdown calculates peak-to-trough decline over trailing 12 months.
CSWC (Capital Southwest) is a sector-specific income fund managed by BDC. It focuses on generating income through strategic holdings. With significant capital, this fund has been operational since its inception.
Strategy: Concentrates on sector-specific opportunities, typically REITs, MLPs, or BDCs with higher baseline yields.
FDUS (Fidus Investment) is a sector-specific income fund managed by BDC. It focuses on generating income through strategic holdings. With significant capital, this fund has been operational since its inception.
Strategy: Concentrates on sector-specific opportunities, typically REITs, MLPs, or BDCs with higher baseline yields.
In the head-to-head battle of CSWC vs FDUS, the choice depends on your specific goal. FDUS wins for Immediate Income with a 10.37% yield. However, CSWC is the better choice for Long-Term Growth due to superior total return performance.
Which fund is safer for retirement income? We analyze the yield sustainability and structural risk.
What is a Yield Trap? A yield trap occurs when a fund advertises an attractive headline yield (10.37% in FDUS's case), but that income is partially funded by Return of Capital (ROC) distributions rather than genuine earnings or realized gains. This means you're essentially receiving your own money back, while the fund's NAV erodes.
12-MONTH PERFORMANCE BREAKDOWN:
Why This Matters: For retirees withdrawing income, this creates a double-whammy effect:
⚖️ Verdict: FDUS exhibits classic yield trap characteristics. Income investors should allocate cautiously and consider pairing with capital-preserving assets (Tier 1-2 funds).
The Bottom Line Question: If you invest $100,000 today, how much cash will you actually receive each month? Here's the exact math:
CSWC
Annual Yield: 4.32%
$360/mo
($4,317/year)
Frequency: monthly
FDUS
Annual Yield: 10.37%
$864/mo
($10,368/year)
Frequency: quarterly
Income Gap: FDUS generates $6,051/year more than CSWC on the same $100k investment.
Over 20 years, that's $121,013 in additional cash flow (before reinvestment).
Context Matters: Higher income doesn't always mean better investment. Review the "Yield Trap" and "Total Return" sections above—you want income that's sustainable, not just headline-grabbing.
Historical data reveals how these funds behave during market stress. CSWC has delivered a superior Total Return of 3.72% over the past year.
What is Max Drawdown? Max drawdown measures the largest peak-to-trough decline in portfolio value during a specific period. Unlike NAV change (which only looks at start vs. end), max drawdown captures the worst moment of pain an investor experienced.
Real-World Scenario: $100,000 Investment
CSWC (More Resilient)
Max Drawdown: -24.44%
-$24,440
Worst unrealized loss
FDUS (More Volatile)
Max Drawdown: -25.79%
-$25,790
Worst unrealized loss
Protection Value: CSWC saved investors $1,350 in drawdown severity on a $100k position.
Why This Matters More Than Total Return: During bear markets or corrections, investors with lower max drawdown are:
⚖️ Capital Preservation Winner: CSWC demonstrated superior downside protection, making it the better choice for retirees who cannot afford steep temporary losses.
Every investor has a unique risk profile. Use our Portfolio Intelligence tool to see the impact of adding these ETFs to your holdings.