It's all about the income generation for me and it allows me to spread out risk. This can let people retire early, retire from full time and go into part time work, have income while they travel the world etc. Every four weeks I know I can log into fidelity and have $1200+ being deposited from MSTY and I can use it, reinvest, buy underlying, or spread the investment around. I'm in about 8 others as well and every Friday, two of them pay me. I've bought the underlying twice at 450 and in the 480s--the absolute worst timing. I have not made money on the small investment into MSTR in my world, but have been better at throwing money into MSTY and receiving the distributions for a MUCH better total return. The dividend comes through options premiums and the synthetic positions created that track the underlying fund activity that has been pretty monstrous part for them as well. I don't have to sell any shares like I would with the underlying to get my money, that I'm in the red on.
While it's nonqualified and taxed as income, the firm is able to be creative about how they label ROC to create tax advantages for those who hold in individual accounts- if you have it in a Roth you're golden. ROC used as a tax tool and will eventually lower cost basis to 0, so it helps being a long term holder. There's a big misconception online about Return of Capital as they provide estimates monthly that aren't particularly accurate, but true it up for end of year statements. The CEO and fund manager have said these funds are meant to be compounding monsters rather than sucking up all the monthly payout to live on. Best to know what your number is for monthly income needed to live and spread across multiple funds and overpay quarterly taxes if you can afford it seems to be the best online strategy. They've only been around 2.5 years as a company, so nobody is an expert. Video below expands on it and can answer a ton of questions if you're considering.