YieldMax Calculator (NAV Erosion)

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Model the economics of high-yield ETFs like YieldMax. See how NAV decay races against dividend income and find the point where your investment stops being profitable.

Your Scenario

Adjustments

Model Assumptions

  • •Yield % is fixed on declining NAV. The dollar payout drops each month as NAV erodes, but the yield rate stays constant.
  • •NAV decay is steady. In reality, decay varies with volatility and the underlying stock. This model uses a constant annual rate.
  • •No reinvestment. Distributions are taken as cash, not reinvested (no DRIP).
  • •Flat tax rate on all distributions. Actual distributions may include ordinary income, short-term gains, and return of capital at different rates.

Select a ticker or enter a share price to see projections.

What is NAV Erosion?

NAV erosion occurs when a fund's share price declines over time, even as it pays large distributions. This is common in covered-call ETFs and YieldMax-style option income funds that sacrifice capital appreciation for high current income.

The Illusion of High Yield

A 60% yield sounds incredible — but if the share price drops 40% in the same year, you're only marginally ahead before taxes. After taxes at ordinary income rates, you may actually be losing money.

Return of Capital vs. Return on Capital

Much of what these funds distribute is return of capital — they're giving you back your own money while the underlying asset loses value.

How This Calculator Works
1

Two Competing Forces

The green line shows cumulative after-tax income. The red line shows cumulative capital loss. Where they cross is where you start losing money overall.

2

Tax Matters — A Lot

YieldMax distributions are typically ordinary income, taxed at 22-37%. This dramatically reduces net income and pushes the breakeven point earlier.

3

The Declining Dollar Payout

As NAV declines, the dollar amount of each distribution also drops. A "60% yield" on $50 pays $30/yr; that same 60% on $25 pays only $15/yr.

4

Use Real Data

Select a ticker to auto-populate inputs with live price, yield, and historically-derived decay rate. Click "Use Real Data" to reset the scenario to actual values at any time.

Important Disclaimer

This tool is for educational purposes only. Projections use simplified assumptions (constant yield, steady decay) that may not reflect actual fund performance. YieldMax distributions vary dramatically month to month. This is not investment advice.

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