FBY: Tax-Efficient Income But Risky At This Level (Rating Downgrade)

  • FBY offers a massive 43% distribution rate, making it attractive for income-focused investors seeking high cash flow, but with significant price decay risk. The synthetic options strategy caps upside and fails to capture META's growth, leading to underperformance versus holding META shares directly. Return of capital distributions provide tax deferral benefits, but also accelerate NAV deterioration if META experiences a drawdown.