OXLC
Oxford Lane Capital Corp.
stock NASDAQ

IF invest in any fund there is a risk of NAV erosion. The problem is income limited to just covered calls. OXLC is not a covered call fund bu it has NAV erosion. The basic problem is that if an investment of a fund expires (like a bond or CLO the fund has to take some of its earning to buy more assets. Covered call funds have the same issue. If fund management distributes too much and doesn't buy enough assets NAV erosion can happen. yield max aim for maximum yield and nearly all there funds have issues with NAV erosion. NEOS aims good sustainable performance So there yields are lower and there is no Evidence of NAV erosion on NEOS and other lower yield covered call funds.

NOt all covered call funds have share price or NAV erosion. ETG and QQQX are two 20 year old covered call funds with no obvious nave NAV erosion and JEPI, JEPQ, SPYI, QQQI, GPIX, GPIQ are all younger covered call that have advantages over the older funds without NAV erosion. Yes some perform badly while others perform very well over the long term And NAV erosion is not just a problem with covered call funds. OXLC has NAV erosion but doesn't use covered calls for income.

It's called NAV erosion. But not all funds have this issue. Many yield max funds like ULTY Have NAV erosion. And you can have NAV erosion in ETF that don't use covered calls. OXLC is one god example. But good covered call fund like SPYI and QQQI take steps to avoid this issues. These steps do reduce the yield they earn but the end result is no NAV erosion for SYPI and QQQI. Even with the reduced yield (SPYI 11%, QQQI 13%) these are very good yields.