Two of the market's most popular income ETFs compared side-by-side. See which one fits your yield strategy.
What this means: DEO is ratedTier 1 (Cornerstone)while HTGC is ratedTier 3 (Specialty).DEO is structurally lower risk than HTGC.
| Metric | DEO | HTGC |
|---|---|---|
| Total Return (1Y) | -10.95% | 0.31% |
| NAV Change (1Y) | -16.49% | -9.76% |
| Max Drawdown | -26.46% | -26.18% |
| Beta | - | - |
* Returns include dividend reinvestment. Drawdown calculates peak-to-trough decline over trailing 12 months.
DEO (Diageo plc) is a conservative dividend growth fund managed by Diageo plc. It focuses on generating income through strategic holdings. With significant capital, this fund has been operational since its inception.
Strategy: Focuses on quality dividend-paying companies with strong balance sheets and consistent payout histories.
HTGC (Hercules Capital) 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 DEO vs HTGC, the choice depends on your specific goal. HTGC wins for Immediate Income with a 10.07% yield. However, HTGC 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 (10.07% in HTGC'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: HTGC 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:
DEO
Annual Yield: 5.54%
$462/mo
($5,543/year)
Frequency: semi-annual
HTGC
Annual Yield: 10.07%
$839/mo
($10,070/year)
Frequency: quarterly
Income Gap: HTGC generates $4,527/year more than DEO on the same $100k investment.
Over 20 years, that's $90,533 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. HTGC has delivered a superior Total Return of 0.31% over the past year.
Every investor has a unique risk profile. Use our Portfolio Intelligence tool to see the impact of adding these ETFs to your holdings.