"AAPD is not a dividend stock fund. It seeks daily investment results of -100% of Apple (NASDAQ:AAPL | AAPL Price Prediction)'s daily return using swap agreements and derivatives. The distributions investors receive come primarily from interest earned on cash collateral held against those swap positions, not from underlying company dividends. Think of it as the interest income generated while maintaining a synthetic short position on Apple."
"AAPD's distributions have deteriorated sharply since the fund's early years. Annual payouts peaked at $0.883 in 2023 and have fallen steadily since, dropping 21.3% to $0.695 in 2024 as the rate environment began shifting. By 2025, the decline accelerated - the Q4 payment of $0.108 marked the lowest single quarterly distribution in the fund's history, reflecting how directly this income stream depends on the interest rate environment rather than any underlying business performance."
AAPD uses swap agreements and derivatives to seek daily investment results of -100% of Apple's daily return, generating distributions mainly from interest earned on cash collateral rather than company dividends. Annual payouts fell from a $0.883 peak in 2023 to $0.695 in 2024, with a Q4 2025 payment of $0.108—the lowest quarterly distribution to date. The fed funds rate dropped from 4.50% in early 2025 to 3.75% by February 2026, reducing available interest income from collateral. The fund has lost 10.82% over the past year and nearly 40% since its August 2022 inception due to Apple's long-term upward trend and daily rebalancing erosion.
Read at 24/7 Wall St.
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