Evaluating the Attractiveness of TrueShares Active Yield ETF (ERNZ) for Income-Oriented Investors in a Volatile Market

For income-oriented investors navigating a volatile market, the TrueShares Active Yield ETF (ERNZ) presents a compelling yet complex proposition. Actively managed and designed to deliver above-average yields, ERNZ holds between 50 and 150 income-generating securities, with a focus on maintaining consistent distributions even during economic downturns [2]. As of August 2025, the fund boasts a dividend yield of 9.20% and a 30-day SEC yield of 2.56%, significantly outpacing the S&P 500’s historical average [5]. However, its 3.25% expense ratio raises critical questions about cost efficiency, particularly when compared to passive alternatives like the Schwab U.S. Dividend Equity ETF (SCHD), which charges just 0.06% [4].

Dividend Consistency in Turbulent Times

ERNZ’s dividend strategy emphasizes adaptability, with monthly payouts adjusted to align with market conditions. In 2025, the fund demonstrated resilience during the Trump-era tariff-driven market crash, maintaining a $0.165 per share dividend in July 2025 despite broader market turmoil [3]. Over the past year, its dividend growth rate surged by 73.68%, reflecting a dynamic approach to capital preservation and yield optimization [4]. This contrasts with the Fidelity High Dividend ETF (FDVV), which has shown volatile dividend growth and a five-year CAGR of just 2.87% [3].

However, ERNZ’s performance during the 2020 pandemic crash remains untested, as the fund was launched in April 2024. Historical data from similar active ETFs, such as the Capital Group Dividend Value ETF (CGDV), suggests that actively managed funds can outperform broad indices during downturns. CGDV, for instance, lost 16.3% during the 2022–2025 drawdown—less than the S&P 500’s 12.9% decline—and rebounded swiftly by mid-2025 [5]. While ERNZ’s active management model shares similarities with CGDV, its higher expense ratio may deter cost-sensitive investors.

Yield Strategy vs. Cost Efficiency

ERNZ’s high yield comes at a premium. At 3.25%, its expense ratio is over 10 times that of the Franklin U.S. Low Volatility High Dividend ETF (LVHD, 0.16%) and the Schwab US Dividend Equity ETF (SCHD, 0.06%) [1][4]. This cost disparity raises the question: Does ERNZ’s yield justify its fees? For investors prioritizing income over cost, the answer may lie in its 9.20% yield, which dwarfs LVHD’s 3.52% and FDVV’s 3.2% [5]. Yet, in a low-interest-rate environment, the trade-off between yield and expense becomes more pronounced.

Risk Considerations

While ERNZ’s active management aims to mitigate volatility, its portfolio’s reliance on a relatively small number of holdings (50–150 securities) introduces concentration risk. In contrast, passive ETFs like SCHD and FDVV spread risk across broader indices. Additionally, ERNZ’s dividend consistency hinges on the fund’s ability to adjust its portfolio in real time—a strategy that worked in 2025 but remains unproven in prolonged downturns like the 2008 crisis [6].

Conclusion

For income-oriented investors willing to accept higher fees for elevated yields and active risk management, ERNZ offers a unique value proposition. Its 9.20% yield and demonstrated resilience during the 2025 crash make it an attractive option in a volatile market. However, the fund’s expense ratio and lack of long-term downturn testing necessitate careful consideration. Investors should weigh ERNZ’s potential against lower-cost alternatives like LVHD or SCHD, particularly if dividend consistency is their primary goal.

Source:
[1] ERNZ,
https://www.true-shares.com/ernz/
[2] ERNZ Dividend History, Dates & Yield,
https://stockanalysis.com/etf/ernz/dividend/
[3] Fidelity® High Dividend ETF (FDVV) Stock Latest News,
https://www.financecharts.com/stocks/FDVV/news
[4] Mutual Fund Prospectuses: Investor Information,
https://www.schwab.com/mutual-funds/find-mutual-funds/investor-information
[5] CGDV ETF Delivers 20% Upside With Strong Dividend Growth,
https://www.tradingnews.com/news/cgdv-etf-20-percent-stock-market-upside-with-dividend-growth-and-moat-backed-power
[6] Understanding bank payouts during the financial crisis of ...
http://cepr.org/voxeu/columns/understanding-bank-payouts-during-financial-crisis-2007-2009