Methodology: How We Score Income Funds

Data

Prices and distributions are end-of-day market data, refreshed weekly after the close. Fund details (issuer, strategy, underlying, fees, launch dates) come from issuer websites and filings. Figures use market price; for closed-end funds and BDCs, results based on NAV can differ.

Yield

12-month yield: payouts with ex-dates in the last 365 days ÷ current price. Forward rate: latest payout × payments per year ÷ price. Payment frequency is the median gap between recent payouts, so one-off specials don't distort it. Funds less than a year old show a forward rate; their 12-month yield is understated.

Earned %

Was the payout earned, or was it your own money coming back? Earned % = total return ÷ payouts (both as a % of the starting price) over 3 months, 1 year, or the fund's full history (up to 5 years).

100% or more: every dollar paid out was earned, and the fund kept or grew its value.
Between 0% and 100%: part of the payout was earned; the rest came out of the fund's value (its price fell).
Below 0%: the price fell by more than the fund paid out.

This is an economic measure. It is not the same as the "return of capital" tax label in a fund's Section 19(a) notice: covered-call and MLP funds often label payouts as ROC even when the fund earned them, and a fund whose price keeps falling is returning capital whatever the label says.

What a fund tracks

Each fund is assigned an exposure (S&P 500, Nasdaq-100, single stock, bitcoin, BDCs, REITs and so on) and, where there is one, the specific underlying it's built on: the stock for single-stock funds (MSTY → MSTR), the index or asset for index and crypto funds (JEPI → S&P 500, BLOX → bitcoin), or a sector benchmark for BDCs (BIZD), REITs (VNQ), mortgage REITs (REM), MLPs (AMLP), preferreds (PFF) and credit (HYG).

Tracking shows how closely the fund's daily moves followed its underlying over the last year: Closely (correlation 0.90 or higher), Loosely (0.70–0.90) or Weakly (below 0.70). Actively managed funds such as JEPI often track only loosely.

Risk measures

All use 1 year of daily total returns (payouts reinvested).

Steadiness = S&P 500 volatility ÷ the fund's volatility. 100% means as steady as the S&P 500; 200% means half as volatile. Cash-like funds score far above 500%, so we cap the display there.
Sortino ratio = (annual return − T-bill rate) ÷ downside volatility. Like the Sharpe ratio, but it only penalises the bad days. Higher is better; below 0 means the fund didn't beat T-bills.
Sharpe ratio = (annual return − T-bill rate) ÷ total volatility.
Beta = how much the fund moves for a 1% move in the S&P 500 (or in its underlying). 0.5 means half as much.
Correlation = how closely the fund's daily moves line up with the S&P 500 (or its underlying), from −1 to 1.
Upside / downside capture = on days the underlying rose, the share of its gain the fund caught; on days it fell, the share of its loss the fund took. Capture ratio = upside ÷ downside; above 1.0 means the fund keeps more of the good days than the bad. We use daily returns, which is noisier than the monthly method some providers use.
Max drop = the worst peak-to-trough fall over the period.
Trend: Uptrend = price above its 50- and 200-day averages with the 50-day above the 200-day; Downtrend = price below both; otherwise Mixed.

DT Score (income quality), 0–100

For buy-and-hold income investors. Funds need about 1 year of history and a 3%+ yield to qualify.

30 points × Earned % over 1 year (capped at 100%)
20 points × yield percentile
20 points × Sortino percentile
10 points × Steadiness percentile
10 points × payout consistency (how little payouts varied over 12 months)
10 points × low-fee percentile

Momentum score, 0–100

For active traders; a 3-month view. Funds need 3 months of history and a 3%+ yield.

50 points × 3-month total return percentile
25 points × 3-month price change percentile (is the fund's value rising, not just paying out?)
15 points for trend (Uptrend 15, Mixed 7.5, Downtrend 0)
10 points × Steadiness percentile

Percentiles are taken within each score's qualifying funds. A fund missing an input gets the neutral half-points for that part. Rank changes compare with the previous week.

Limits

Every measure here looks backward. A strong score is not a prediction, and funds with short histories can swing a lot from week to week. Corrections are welcome.