"The fund's reported dividend yield is just 0.69%, meaning most monthly distributions come from option premiums and, critically, return of capital. Return of capital (ROC) is not income in the traditional sense. When a fund distributes more cash than it earns, it returns a portion of your own investment to you."
"The current monthly distribution of $0.2396 per share annualizes to roughly $2.88 per share. With the fund trading near $18.11, that implies a yield of approximately 15.9% on current price. Sustaining it requires either strong option premium income or ongoing capital distribution."
VistaShares Target 15 Berkshire Select Income ETF aims to provide monthly income by replicating Berkshire Hathaway's top equity holdings and selling covered call options. Launched on March 4, 2025, it has attracted nearly $690 million in assets, appealing to retirees and income investors. However, the fund's 0.95% expense ratio and reliance on option premiums raise concerns about the sustainability of its 15% annual distribution target. Most distributions come from return of capital, which can erode the portfolio's value over time, despite a stable NAV since inception.
Read at 24/7 Wall St.
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