How to Stop NAV Erosion With This Monthly Paying ETF

Here is the "defensive" strategy that pays you monthly while buying insurance against a crash.

We need to talk about the dirty secret of income investing.

Most investors chase the highest yield they can find. They buy funds paying a dividend yield of 25% (like the REX FANG & Innovation Equity Premium Income ETF FEPI 0.00%↑)…

or a dividend yield of 50% (like the YieldMax Universe Fund of Option Income ETF YMAX 0.00%↑) …

and feel like geniuses. But when they look at their account balance five years later, they realize something terrifying.

The share price has collapsed. For instance, look at the share price of the two high yield funds I just mentioned. The market indices are sitting at all-time highs, but these funds struggle to provide growth.

This is called NAV Erosion.

NAV = Net Asset Value.

It happens when a fund pays out more than it actually earns. It is essentially giving you your own money back and calling it a “dividend.” You are not getting richer. You are just liquidating your position slowly and hoping the dividends offset the erosion. While I personally utilize some of these funds, you need to approach these positions strategically and have a way to offset the NAV erosion.

I utilize these risky income funds to help generate more than $41K in annual dividend income. However, I offset all of these income positions with growth and defensive bucket 1 companies.

👉 I track my monthly dividends with the Yieldly Dashboard.

For a long time, I believed you only had two choices. You could either:

1. Buy “Growth” stocks and earn zero income

2. Buy “Income” and watch your capital erode.

But I recently found a third option.

There is a specific fund designed to solve this exact problem. It offers a ~9% yield and monthly paychecks, but it does something most income funds refuse to do. It buys insurance on your portfolio to stop the bleeding when the market crashes. As we can see below, this fund’s total return sits over 78% over a 5 and a 6 year period. Not bad for an income fund.

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The “Defensive” Income Strategy 🛡️

This fund offers a rare combination that most income funds simply cannot match. Here is the simple breakdown of how it works:

It Owns the Real Assets: Unlike many high-yield funds that use “synthetic” contracts or risky debt, this ETF actually holds the physical shares of the Nasdaq-100 companies.

You own the best companies in the world, including Apple AAPL 0.00%↑, Amazon AMZN 0.00%↑, Meta Platforms META 0.00%↑, and Nvidia NVDA 0.00%↑, just to name a few.

Here’s how the funds strategy actually works.

1. It Generates Monthly Cash: It sells call options on the index to generate a ~9% annualized yield that is paid out to you every single month.

2. It Buys Insurance: This is the secret sauce that makes it unique. It takes a portion of that income and uses it to buy a “Put Spread.”

Think of this as buying a dedicated insurance policy for your portfolio. When the market is healthy, the fund pays you. When the market crashes, that insurance policy kicks in to protect your capital from erosion.

👉 Consider upgrading to get access to these top tier dividend funds. Paid subscribers also get instant access to the Yieldly Dashboard.

The fund I am talking about is the :