SharkWater Trading  •  Income Desk • ETFs • Distribution Quality

THTA's Advertised 10 Percent Yield Is Really 3.19 Percent Plus Your Own Money

September 13, 2026

Bottom Line Up Front

SoFi Enhanced Yield ETF (NYSE Arca: THTA) advertises a 10.00 percent distribution rate. Its 30-day SEC yield, the figure that reflects what the portfolio is actually earning, was 3.19 percent as of August 31, 2026. The Section 19a-1 notice for the August 18 payment, missing from this desk's coverage until now, shows why the two numbers don't match: 34.44 percent of that $0.13055 per share distribution was return of capital, and 40.63 percent of everything the fund has paid out fiscal-year-to-date is return of capital.

A fund handing back roughly two of every five dollars it distributes as your own principal is not earning a 10 percent yield. It is partially returning your money to you at a 10 percent annual pace and calling the whole thing a yield.

The Number On The Page Is Not The Number In The Portfolio

A distribution rate is arithmetic: take the most recent payment, annualize it, divide by the share price. It says nothing about where the money came from. A 30-day SEC yield is a regulated calculation of what the fund's holdings actually generated in income over the trailing month. When those two numbers sit close together, the fund is basically paying out what it earns. When they sit nearly seven points apart, as they do here, the fund is paying out more than it earns, and the gap has to come from somewhere.

For THTA, the gap comes partly from ordinary income and partly from return of capital. Return of capital is not automatically a red flag. It can reflect unrealized gains not yet ready to be characterized as income, or it can reflect option-related mechanics common to enhanced-yield strategies. But it can also mean the fund is distributing money it never earned, which is a slow return of your own investment dressed up as a payout. Without a distribution's actual composition, there is no way to tell which one you are holding. That composition is exactly what a Section 19a-1 notice discloses, and it is exactly what was missing from this desk's THTA coverage until this week.

Advertising a 10 percent yield off a 3.19 percent income stream is like weighing a fish with the cooler, the ice, and the net still on the scale. The number on the dial is real. It just isn't the fish.

What The 19a-1 Notice Actually Shows

Period	Net Investment Income	Return of Capital
Latest distribution ($0.13055/share, paid Aug. 18, 2026)	65.56%	34.44%
Fiscal-year-to-date cumulative ($0.7760/share paid through Aug. 18, 2026)	59.37%	40.63%

Source: SoFi THTA product page and linked Section 19a-1 notice, sofi.com/invest/etfs/thta/, accessed September 13, 2026. These percentages are the SEC-required estimates the fund itself publishes at each distribution and are subject to change on the fund's Form 1099-DIV at tax time. No distribution had been declared for September as of this writing.

What We Still Don't Know

This desk did not source THTA's total return since inception or its NAV trend over time this cycle. That matters: a fund can distribute return of capital indefinitely without harming an investor if it is simply redistributing gains ahead of their formal characterization, and it can quietly erode principal if NAV is declining while distributions hold steady at 10 percent. Those are opposite stories with an identical 19a-1 notice. This post reports composition, not verdict on NAV, and says so rather than guessing.

The Bull Case

• 3.19 percent is a real number. The fund's SEC yield is not zero. Income-oriented investors are still getting paid something out of actual portfolio earnings, not fiction.
• Return of capital can be tax-deferred, not tax-free-loss. ROC typically reduces an investor's cost basis rather than triggering an immediate income tax hit, which can suit a holder in the right bracket and time horizon, provided NAV isn't declining underneath it.
• Disclosure discipline is intact. SoFi is publishing the 19a-1 notice as required, on schedule, with specific percentages rather than vague boilerplate. That is the mechanism working as designed, even if the headline number it's correcting is aggressive.

The Bear Case

• The advertised yield is roughly three times the actual income yield. An investor buying THTA for "10 percent" is buying a number that is more than two-thirds composed of something other than the fund's own earnings.
• 40.63 percent return of capital, year-to-date, is not a rounding error. That is a large and apparently persistent share of every dollar paid out, not a one-time technical adjustment.
• Nobody outside the fund can currently see the NAV side of the ledger. Without a NAV trend, there's no way to confirm the return of capital isn't simply principal erosion, and the fund's own marketing has no incentive to volunteer that comparison.

The SharkWater Take

Nobody should buy THTA for the 10 percent number. That number describes a distribution policy, not a return, and this fund's own paperwork now says so in writing. Whether it's still a reasonable holding depends entirely on the NAV trend I don't have in front of me, and I'm not going to pretend a guess is a conclusion. If you already hold this for income, pull the fund's NAV history before the next distribution and see whether it's held flat against a 40-plus percent return-of-capital rate. If it has, this is a tax-deferral play that happens to be marketed badly. If it hasn't, you're being paid back in your own capital and told it's yield. I'll follow up once NAV data is in hand. Until then, treat the 10 percent headline as advertising, not information.

Tight lines. — SharkWater

Educational and informational purposes only. Not personalized investment advice. All figures sourced as noted and accurate as of publication. Options involve substantial risk of loss. The author may hold positions in securities discussed. Do your own work.