Real yield — unscreened. It equal-weights the 80 highest-yielding stocks in the S&P 500 with no quality or sustainability screen, so the weakest payers carry the same weight as the strongest. The $2.06 trailing distribution is cash actually paid, but the annual total fell in 2020, 2021 and 2023 and has compounded at only ~1.9%/yr since 2019 — the income is real, and it shrinks when its payers are stressed.
Key risk: Selection is by yield alone, with no quality screen and equal weights — when high yield is a distress signal, the fund holds those payers at full weight, and the distribution falls with their cuts, as the 2020 annual total did, down 6.5% to $1.63.
Changes if: The index adds a quality or sustainability screen, or the annual distribution compounds through a full downturn without a down year — either would change what the yield is made of.
- !Coverage check: No quality or sustainability screen at the index level: the top 80 yielders in the S&P 500 are equal-weighted, so no filter removes payers whose yield is high because the price — and the business behind it — is falling.
- ✓Yield check: 4.24% trailing is cash actually paid — $2.06 a share over the last four quarters, divided by the $48.59 close on Oct 23, 2026 — dividends from S&P 500 companies, not return of capital or option premium.
- !Dividend growth check: Uneven: the annual total fell in 2020 (−6.5% to $1.63), 2021 (−5.1%) and 2023 (−7.8%), and the 2019–2025 compound rate is only ~1.9%/yr ($1.75 → $1.96), despite +5.0% in 2025.
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.