Yield trap — an 11.3% yield on a price down 89% in ten years. REM paid $1.98 per share over the trailing 12 months, an 11.28% trailing yield at the $17.56 close on October 27, 2026, from mortgage REITs led by Annaly (22.17%) and AGNC (15.70%). Annual distributions have declined every year since 2022 ($2.52 in 2022 to $1.93 in 2025), the 10-year price return is −89.48%, and the yield has risen to 11.28% mainly because the price fell from a $24.05 52-week high. The payout is spread income from leveraged mortgage portfolios, not rent.
Key risk: Two holdings are nearly 38% of the fund, both leveraged mortgage REITs, so a spread shock or a single dividend cut from Annaly or AGNC hits the fund's payout and price together.
Changes if: Five-year total return turns positive, annual distributions grow for two consecutive years, and the price stabilizes — the current trend is the opposite on all three.
- ✕Trap check — distribution vs. total return §8 review triggered at ≥8%. 5-yr NAV total return negative (AAII 5-yr return −4.4%/yr; cumulative NAV total return −13.39% over 5 years per AInvest) vs an 11.28% yield; 10-yr price return −89.48%.
- ✕Expense check 0.48% exceeds the §7 fail line (>0.30%).
- ✕Dividend-growth check Annual totals $2.5245 (2022) → $2.231 (2023) → $2.0528 (2024) → $1.929 (2025) — declining, §7 fail.
- ✕Price-erosion check 52-wk high $24.05 → $17.56 (−27%); 1-yr price return −21.01%; yield rose as price fell.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.