A 50% headline yield means nothing if NAV drops 40% over the same period. This guide shows you the math they don't advertise — and which high-yield ETFs hold up under scrutiny.
A 20% yield on a fund that loses 15% NAV annually is a 5% return. The income statement looks good. The balance sheet doesn't.
ROC isn't free income — it reduces your cost basis, creating a taxable event later while masking the fund's inability to earn its distribution.
Marketing materials lead with headline yield. The Yield Trap Detector shows you the 12-month NAV chart alongside the distribution history.
Chapters marked Most Relevant are specifically applicable to your situation.
A systematic framework for classifying any income ETF from Cornerstone (Tier 1) to High Octane (Tier 5).
The 6 structural signals that separate sustainable income from return-of-capital illusions.
How distributions exceeding earnings gradually destroy principal — with real ETF case studies.
How to read a fund's distribution coverage ratio and what thresholds signal danger.
Real ETFs analyzed: which ones are yield traps, which are sustainable, and why.
A printable checklist to evaluate any dividend ETF in under 30 seconds.
A deep-dive due diligence process for any ETF you're considering adding to your portfolio.
How to combine tiers for your specific income goal — conservative to aggressive allocation models.
Net 4.1% Real Return
The average "12% yield" high-yield ETF delivered 4.1% total return over 3 years after accounting for NAV erosion. That's below SCHD.
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