NAV Erosion Calculator

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Model yield vs share-price decay for YieldMax, covered-call, and other high-yield ETFs. Decay is fitted to traded NAV, not dividend-adjusted total return.

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.
  • •Decay is fitted to traded NAV, not dividend-adjusted total return. Distributions already hit the price; they are not subtracted again.
  • •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.

Related: Covered call ETFs · YieldMax ETFs · Highest yield ETFs · Compare dividend returns

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 payouts are often ordinary income or return of capital. Covered-call funds like QQQI are usually not taxed the same way. The default here is 24%, not a 37% top-bracket rate — change it to match your situation.

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 NAV, Not Total Return

Selecting a ticker loads live price and yield, then fits decay to traded NAV over the trailing 12 months (inception if the fund is newer). Dividend-adjusted prices are ignored — those hide the erosion this tool is built to show.

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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