COII.L Investment Autopsy
An interactive breakdown of a £1,000 investment in IncomeShares Coinbase ETP from Aug 2025 to Sep 2026.
Total Return vs Yield Traps (%)
Notice how Dist. Yield artificially spikes higher than your actual Yield on Cost as NAV drops.
Left Axis: Total Return
Right Axis: Yields
| Month | Ann. Yield on Cost | Dist. Yield | COIN % | COII.L % |
|---|
Where did my £1,000 go?
Bars = monthly wealth decomposition. Trend chart below compares your COII.L wealth trajectory vs. holding COIN directly — the gap between lines is the net value the strategy added (or cost). Each dividend shows its change vs the previous payment.
Left Axis: £ Value
Right Axis: % Initial
A. Wealth Decomposition (£)
| Month | Monthly Div £
% vs last payment
|
Cum. Cash £ | Lost £ | Pure COIN £ | Shares £ | Total Return £ |
|---|
Understanding NAV Decay: Wealth Transfer vs. Return of Capital
A common misconception with high-yield cash-secured put ETPs is that a dropping share price (NAV) means the fund is simply handing you your original investment back—known as Return of Capital (RoC). This is not the primary driver here.
Harvesting Extrinsic Value
COII uses a hybrid: ~25% direct COIN + ~75% short cash-secured puts. Put premium (extrinsic value: time + volatility) is the primary income engine. (Coinbase pays no dividend.)
The Wealth Transfer
On ex-div date, harvested cash moves from fund NAV to your brokerage account. Share price drops mechanically by the dividend amount. This is a deliberate transfer of wealth (ETP → Cash), not an inherent loss.
The Real Cause of Erosion: The 75% short put book carries liabilities that balloon when COIN falls (high gamma), and the 25% COIN slice marks down 1:1 with the stock. Two drags compound: that’s why COII.L fell -74.1% while COIN “only” fell -37.4%. On top: 0.55% mgmt fee + roll costs of short-dated puts.
Comprehensive Return Analysis
A detailed breakdown comparing underlying stock performance to real ETP wealth.
| Period End | COIN Price ($) | COIN Return | COIN Value (£)* | COII Price | COII Portfolio (£) | Dividends (£) | Yield (Cum.) | Total Wealth (£) | COII Return | Wealth Delta |
|---|
* COIN Value (£): Shows what your £1,000 would be worth if you held the underlying COIN stock. FX Note: This calculation applies the stock’s USD percentage return directly to the GBP initial investment. This isolates the underlying asset’s performance from USD/GBP exchange rate fluctuations for a direct strategy comparison.
* Wealth Delta: Compares your Total Wealth in COII to the hypothetical COIN Value. A positive number means the ETP’s cash distributions successfully protected you from underlying stock losses.
Final Verdict: The Journey to “House Money” and Beyond
Over this 14-month period (Aug 2025 – Sep 2026), the £1,000 investment suffered a -27.3% net loss. While the fund delivered a substantial £468.41 in cash distributions, it wasn’t enough to entirely offset the 74.1% collapse in the fund’s NAV value caused by its 25/75 hybrid structure (25% direct COIN + 75% cash-secured puts) and the underlying asset’s drawdown. Crucially, COII.L fell more than COIN itself (-74.1% vs -37.4%) because the 75% short put book amplified the downside — the 25% COIN slice alone could not compensate.
However, investing in ultra-high-yield cash-secured put ETPs is not about traditional total return; it is about timeline survival. The lifecycle of a successful investment in COII looks entirely different from a standard growth stock:
Months 1-14. The initial capital bleeds heavily. The dividends don’t cover the NAV decay yet. You are underwater on total return, but accumulating a growing pile of cash. September’s distribution of £26.71 was the second-biggest of the year — up 34% on August’s £19.92, and well above July’s £12.27 low. Encouraging, but the underlying risk never fully goes away.
Estimated Months 18-24. If COII continues to pay out at this aggressive rate (cumulative ~£30/mo average), your cumulative cash dividends finally cross the £1,000 threshold. 100% of your initial risk is officially off the table.
Beyond Month 24. Your original capital is safe in your bank account. The remaining NAV in the fund—even if it has dropped significantly—is now generating pure, unencumbered monthly profit.
The Bottom Line
COII.L is a cash-flow engine built for a specific timeline. You are accepting severe, potentially permanent capital erosion in exchange for accelerated cash recovery. Do not buy this fund expecting your NAV to grow. You buy this fund to survive long enough to reach Phase 3, after which every dividend is a risk-free return on capital that has already paid for itself.