Frequently Asked Questions

What is the IQ Score?

The IQ Score is a proprietary research framework designed to evaluate the quality of income-producing investment assets. Rather than focusing primarily on yield, it analyzes a broad range of financial and structural characteristics to classify assets as Friends, Question Marks, or Foes.

The goal is simple: help income-focused investors make better-informed decisions based on objective data rather than headline yield alone.

Is the IQ Score investment advice?

No.

The IQ Score is an independent research publication. It provides a structured assessment of investment quality but does not recommend that you buy, sell, or hold any particular security.

Every investment decision remains your own responsibility and should take your personal financial circumstances and objectives into account.

Does the IQ Score predict future returns?

No.

No research model can reliably predict future market returns, and we do not claim otherwise.

The IQ Score is designed to evaluate the current quality and health of income-producing assets based on available data. While higher-quality assets may have a greater probability of producing sustainable income over time, every investment remains subject to market risk.

Why doesn't the IQ Score focus on yield?

Because yield alone tells only part of the story.

High yields can sometimes reflect strong income opportunities, but they can also signal elevated risk, deteriorating fundamentals, or unsustainable distributions.

The IQ Score is built on the principle that sustainable income begins with underlying quality—not simply the highest yield available.

What do Friends, Question Marks and Foes mean?

These classifications provide a simplified interpretation of the research.

Friends represent assets that currently demonstrate strong overall quality characteristics.

Question Marks show mixed signals and may require additional analysis before making investment decisions.

Foes display multiple warning signs that suggest investors should exercise increased caution.

These classifications are research outcomes—not investment recommendations.

How is the IQ Score calculated?

The IQ Score combines numerous financial, operational and structural indicators into a standardized scoring framework.

Rather than relying on a single metric, the model evaluates multiple dimensions of quality to produce a balanced assessment.

The methodology continues to evolve as additional research, validation and historical evidence become available.

Why were these factors selected?

The framework was developed through extensive research into the characteristics commonly associated with financially stronger and weaker income-producing assets.

Our objective is not to create the most complicated model possible, but to identify factors that consistently provide meaningful insight into long-term income quality.

As our research expands, the methodology may be refined to incorporate new evidence.

Is the IQ Score a black box?

No.

While certain proprietary aspects of the methodology remain confidential, we believe transparency is essential.

Each asset includes supporting information such as classification, confidence levels and explanatory summaries that help investors understand why an asset received its current assessment.

Can the methodology change?

Yes.

Markets evolve, accounting standards change, and new research becomes available.

If evidence demonstrates that improvements can make the framework more accurate or more informative, the methodology may be updated. Significant methodology changes will always be documented and communicated transparently.

Can a Friend still perform poorly?

Absolutely.

A Friend is not guaranteed to outperform the market or avoid losses.

Unexpected events, economic recessions, regulatory changes, interest-rate movements or company-specific developments can negatively affect any investment.

The IQ Score evaluates quality—not certainty.

Can a Foe outperform?

Yes.

Markets can remain irrational for extended periods, and lower-quality assets may occasionally deliver exceptional short-term returns.

The IQ Score focuses on long-term quality characteristics rather than short-term market performance.

How do you validate the IQ Score?

Validation is an ongoing process.

Historical IQ Score snapshots are preserved so that classifications can be evaluated over time against real-world outcomes such as dividend sustainability, financial health and long-term performance.

Our objective is continuous improvement supported by measurable evidence rather than anecdotal success stories.

How does the IQ Score differ from Morningstar ratings?

The two serve different purposes.

Morningstar evaluates investments using its own research methodologies, valuation frameworks and analyst opinions.

The IQ Score focuses specifically on the underlying quality of income-producing assets using a transparent, data-driven framework designed for income-focused investors.

Rather than replacing existing research, the IQ Score is intended to complement it.

Which asset classes are covered?

Coverage continues to expand over time.

The research primarily focuses on income-producing assets such as:

• Closed-End Funds (CEFs)
• Business Development Companies (BDCs)
• Real Estate Investment Trusts (REITs)
• Income-focused ETFs
• Other income-oriented securities where sufficient data is available

Why isn't my favorite investment included?

Not every security currently meets our data quality requirements.

We would rather exclude an asset than publish an assessment based on incomplete or unreliable information.

Coverage will continue to grow as additional datasets become available.

Why are historical IQ Score snapshots publicly available?

We believe research should be transparent.

Historical snapshots allow investors to review previous classifications and independently evaluate how the framework has performed over time.

Subscribers are paying for access to the most current research—not for secrecy.

What do paid subscribers receive?

Members receive the latest monthly IQ Score research, including current classifications, new Friends, downgrades, upgrades, research commentary and ongoing updates.

Higher subscription tiers may also include earlier access to newly published research and additional member benefits.

Why should I trust the IQ Score?

You shouldn't trust any research framework blindly—including ours.

Instead, evaluate the methodology, review historical snapshots, understand the underlying principles and decide whether the framework adds value to your own investment process.

Our goal is not to replace independent thinking.

Our goal is to help investors make better-informed decisions through disciplined, transparent and evidence-based research.