Oxford Square Capital’s net asset value has declined by more than 18% over the past 12 months, a trend the firm expects to persist through the next quarter. The company’s 22.7% dividend yield, once underpinned by robust net investment income, is now fully unsupported by current earnings—net investment income fell 12% year-over-year in Q4. Meanwhile, operating expenses have risen 9%, driven by higher management fees and compliance costs, and total debt has increased by $45 million to fund portfolio restructuring. With new investment activity down 35% compared with the prior year and mark-to-market losses continuing in several legacy holdings, management has signaled that NAV erosion will remain a primary investor concern until asset performance stabilizes or fresh capital inflows accelerate.

Three actively managed option-writing ETFs—DIVO, QDVO and QQQH—have structured their strategies to limit net asset value decline even in volatile markets. DIVO allocates 20–30% of its assets to out­-of­-the­-money covered calls over a basket of dividend-growing large-caps; since inception in 2016 it has generated a cumulative total return of 198.8% while NAV has declined by an average of just 1.2% annually. QDVO, launched in 2021, writes calls on 30–50% of its tech-growth holdings and currently yields 9.8%; in its shorter track record it has limited NAV erosion to a quarterly average of 0.6%. QQQH blends a high-income overlay across a Nasdaq 100 replication, capping NAV drawdowns at under 2% in each of the past two rising-rate cycles. All three funds report expense ratios between 0.45% and 0.65%, helping preserve capital and mitigate the drag on NAV typical of traditional covered-call vehicles.