YieldMax Ultra Option Income Strategy ETF (ULTY)
ARCA ARCA Primary 
ULTY: Riding Innovation At Reduced Risk
ULTY offers an option-writing strategy on a unique, diversified basket of high-growth, high-volatility stocks, balancing income generation with risk mitigation. While the Fund underperforms broad and innovation ETFs in bull markets, it provides significant downside protection and smoother returns in adverse or flat markets. Aggressive payouts (~63% of invested capital in 14 months) come with notable NAV erosion, highlighting the classic trade-off in income-focused option ETFs.
ULTY: A Lot Of Complexity For A Return Lower Than A Government Bond
ULTY's 160% trailing 12-months dividend yield is, I believe, misleading and unsustainable, potentially resulting in negative returns due to rapid capital depreciation. The ETF's actively managed covered call strategy incurs high costs, including a 1.14% expense ratio, diminishing overall returns. Historical data shows an average monthly capital decline of 8.11%, leading to significant capital losses since its launch.
ULTY: Look Under The Hood, Don't Fall For The 85% Yield Mirage
ULTY, an actively managed buy-write ETF, aims for high distributions but has underperformed, delivering only a +5.3% total return in the past year with a 28% annualized volatility. The fund's strategy involves selecting high volatility equities and writing covered calls, but this approach has led to significant NAV losses. High distribution yields can be misleading; ULTY's 85% stated yield is unsupported, with the fund's NAV dropping over 50% in the past year.
ULTY: The Managers Proved Me Wrong (Upgrade)
YieldMax Ultra Option Income Strategy ETF has significantly improved, with a distribution rate of nearly 86%, justifying an upgrade from sell to hold. Despite improved performance, ULTY remains risky due to manager discretion and lack of transparency in trading strategies, preventing a buy rating. The fund's holdings have diversified but remain highly volatile, making it suitable only for aggressive income portfolios with a small allocation.
ULTY: Adding Leveraged ETFs To Its Portfolio
ULTY's strategy of targeting high IV securities for covered calls is flawed, leading to long-term underperformance. The fund is deviating from its original strategy, now investing 15% in highly volatile triple-levered ETFs, increasing risk and potential losses. Leveraged ETFs introduce convexity risks and volatility decay, which can result in significant deviations from underlying indices and extreme price moves over time.
ULTY's Underperforming Strategy: A High-Risk, Low-Reward Gamble
YieldMax Ultra Option Income Strategy ETF offers a 101% distribution yield but has only delivered 2.4% total performance since inception, highlighting significant risks. The fund's strategy involves selling options on highly volatile stocks, leading to high premiums but substantial principal erosion and underperformance compared to benchmarks. ULTY's aggressive approach contrasts with more conservative income-generating ETFs like JEPI and QYLD, which better preserve principal while providing income.
ULTY: Ignore This Extremely High-Risk Income Trap
YieldMax Ultra Option Income Strategy ETF is a high-yield ETF built to satisfy investors' thirst for income. Unfortunately, it doesn't deliver. Despite a seemingly high distribution rate, the Fund's strategy focuses solely on high-volatility assets, which is causing severe principal erosion and falling payouts for investors. ULTY's high turnover and mechanistic payout structure exacerbate its poor performance, and we think returns would likely worsen in a bear market.
ULTY: ~74% Trailing Yield, But Look Out Below
YieldMax Ultra Option Income Strategy ETF has seen a significant price drop, losing nearly 50% since its IPO, despite high monthly distributions. The fund's total return to date is -11.94%, with a trailing dividend yield of ~74%. ULTY's top sector exposures are tech, healthcare and financials, but most top picks have underperformed in 2024, contributing to its poor performance.
ULTY: Paying 1.24% For A Manager To Play With Options
YieldMax ETFs and I have a complicated relationship, but I recently gave their fund-of-funds ETF, YMAX, a positive rating. This gave me confidence when I found the YieldMax Ultra Option Income Strategy ETF. Unfortunately, I have identified several major risks and issues with the fund, and I am giving it a "sell" rating.
ULTY Offers An Appealing Income Feature In A Weak Market
YieldMax Ultra Option Income Strategy ETF is recommended with a hold rating due to its income generation and high correlation with the NASDAQ Index. ULTY employs an actively managed covered options strategy across various tech sector equities, providing diversified exposure and potential income stability. Despite a high expense ratio of 1.24%, ULTY's forward distribution rate of 84.43% significantly outpaces QQQ's yield, justifying its cost for passive income seekers.
ULTY: 2 Ways To Utilize The Massive Distribution
YieldMax Ultra Option Income Strategy ETF offers a high annual distribution rate of 83% by implementing covered call strategies. ULTY is an actively managed fund with changing holdings based on implied volatility levels and catalysts like earnings season. Strategies to utilize ULTY include implementing a dividend wheel approach or supplementing retirement income, but caution is advised due to tax implications and market uncertainties.
ULTY: Avoid This Loser's Game
YieldMax Ultra Option Income Strategy ETF is an actively managed fund that generates monthly income from covered calls on high-IV U.S.-listed securities ahead of catalysts. The strategy appears to be a classic loser's game where a single error can lead to significant portfolio losses. I urge investors to look beyond the fund's 100%+ annualized distribution yield and avoid this bad bet.
