Since its launch early in 2018, the fund has provided steady monthly payouts that have averaged 7% annually. “It’s a little recycling cash machine,” says Jonathan Rothschild, an individual investor in the New York area who owns shares of the 7HANDL fund. But the 7HANDL fund, which owns both stocks and bonds, has made trade-offs to achieve that high yield. And for good reason: When stocks stop going up, a fund like this can lose a main source of yield. Special tax features of ETFs have enabled 7HANDL to distribute stock gains as monthly yield without creating an immediate tax burden for its shareholders.

Source: Wall Street Journal December 18, 2021 09:05 UTC