NVDY has significant risks because of the strategy this fund uses. This ETF has benefitted from an ideal investing environment that isn't likely to continue for multiple reasons. Most dividend and income investors should be able to find better alternative investments with a more appealing risk profile.
YieldMax NVDA Option Income Strategy ETF offers high yield income via covered call strategy, with a current dividend yield of 105%, based on the latest monthly dividend which is variable. NVDY relies on NVDA stock, leading to single issuer risk, but offers potential for price appreciation and monthly income from options premiums. NVDY is a top-ranked nontraditional equity/derivative income fund, providing high yield income with some growth potential for investors.
YieldMax NVDA Option Income Strategy ETF, a YieldMax product, uses a synthetic covered call strategy on Nvidia Corporation to generate income, but faces potential decay in that yield over time. The NVDY fund pays out option premiums as yield regardless of profitability, leading to weakening buying power for the fund's NAV. NVDY may be suitable for investors seeking short-term high yields or partial exposure to Nvidia, but long-term investors should avoid due to decay in yield and tax implications.
YieldMax NVDA Option Income Strategy ETF offers income and exposure to Nvidia Corporation stock upside through a synthetic long position and selling calls. The ETF has a high management fee of 0.99% and has underperformed Nvidia stock since its inception. Selling covered calls on Nvidia may not be a great strategy at the moment due to incredible momentum and stock split.
The YieldMax™ NVDA Option Income Strategy ETF offers a high yield of around 50% by selling call options on NVDA. Investors who have been with NVDY from the start have seen a total return of over 103% in just over a year. NVDA just reported strong Q1 Fiscal 2025 earnings growth, with revenue up 18% sequentially and net income up 628% year-over-year.
The YieldMax NVDA Option Income Strategy ETF (NVDY) has continued to underperform Nvidia (NASDAQ: NVDA) this year. Its total return – price and dividends – has risen to 63.20% this year while Nvidia has risen by over 91.40%.