YieldMax Universe Fund of Option Income ETFs (YMAX)
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This Ultra-High Yield ETF (YMAX) Is the Best Performer and Paying a 72.34% Distribution
Investors can diversify across many ultra-high-yield funds with the YieldMax Universe Fund of Option Income ETFs (YMAX).
YMAX: An Efficient Weekly Income Machine
YieldMax Universe Fund of Option Income ETFs offers a high-yielding option with weekly payouts, attracting income-seeking investors despite market volatility. YMAX's distribution rate exceeds 65%, though it varies weekly based on market conditions and the fund's option strategy performance. Despite a 33% price drop since inception, the Fund's total return, including dividends, is nearly 21.5%, emphasizing its income-generating potential over capital appreciation.
YMAX Doesn't Deliver Durable Income
YMAX offers diversified volatility exposure and aims for stable returns through equal-weighted investments in YieldMax income plans. The fund has shown a 34% annualized return in payouts, but lags behind the S&P 500 in total growth, raising concerns about its overall effectiveness. Concerns on timing an entry and use case are evident.
YMAX: I'll Take One Of Everything
YieldMax Universe Fund offers high income through a fund-of-funds approach, bundling various YieldMax ETFs to mitigate idiosyncratic risks. YMAX's 97% 30-day SEC yield is attractive, but the fund suffers from price decline and tax inefficiency, distributing most returns as ordinary income. Suitable for aggressive investors in tax-advantaged accounts, YMAX should be limited to 5% of an aggressive income portfolio or 3% alongside YMAG.
YMAX: Diversification Risk Hurts Income Prospect
YieldMax Universe Fund offers a high yield of 57%, but its diversified options-income strategy leads to NAV decline. YMAX's holdings employ synthetic covered calls, causing NAV erosion if underlying stocks decline, unlike traditional income funds with stable principal. Comparing YieldMax funds based on TSLA, NVDA, and COIN shows varied performance due to different underlying stock movements, impacting total returns.
YMAX: Paying Extra Management Fees For No Good Reason
YieldMax™ Universe Fund lacks a coherent investment theme and holds a mix of tech, crypto, and unrelated sectors, making it inefficient and erratic. YMAX charges a 0.29% management fee on top of acquired expenses for a 1.28% gross expense ratio, while offering no real diversification or strategic value. Individual YieldMax funds should be chosen based on specific market conditions and stock performance, rather than holding a mixed bag like YMAX.
YMAX: Bundling Ultra Strategies Has Worked Surprisingly Well
YMAX, a fund-of-funds holding various YieldMax ETFs, offers high income with a distribution rate up to 47.25%, outperforming the S&P 500 since my initial recommendation. The underlying funds' strategies include buying T-Bills, creating synthetic long positions, and trading options, which maximizes yield but carries significant active management risk. Major risks include high fees, volatile income, and reliance on YieldMax's strategy, making YMAX suitable only for aggressive investors with a recommended 5% allocation.
Why I Am Not A Big Fan Of YMAX ETF
YMAX grabs headlines with its massive distribution yields, but investors should be aware of a few important shortcomings. Among them are equal weighting and high costs that are hindering YMAX's performance. But, the biggest concern for YMAX's investors is NAV erosion, which may lead to declining distributions per share long-term.
YMAX: High Risk With Underperformance
YieldMax offers ETFs focused on high income by using advanced options strategies to simulate holding volatile stocks and selling calls on them. YieldMax's ETFs target highly volatile stocks, maximizing option premiums and providing high income potential but also exposure to large drawdowns. Covered call strategies are vulnerable to whipsaw, being exposed to full downside risk but only capped recovery potential.
YMAX: A Gigantic Yield That Comes With A Price
Tidal Trust II - YieldMax Universe Fund of Option Income ETFs (YMAX) offers a high dividend yield of 43%, but its aggressive option strategy risks capital erosion. YMAX invests primarily in other YieldMax ETFs, providing diversification but also resulting in higher expense ratios and variable weekly dividends. The fund's strategy caps upside potential while leaving downside risk uncapped, leading to price performance that trails the broader market.
YMAX: Very High-Yielding Fund Of Funds
YieldMax Universe Fund of Option Income ETFs offers high distribution yields, with a trailing cumulative yield of ~40.63%, and switched to weekly distributions in September 2024. The YMAX ETF primarily invests in other ETFs using options strategies, leading to high yields but also significant price volatility and risks, especially in bear markets. Despite a total return of ~24.3% in 2024, YMAX underperformed the S&P 500 Index during market downturns, raising concerns about its resilience in adverse conditions.
YMAX: Unconventional Method To Wealth Building That Outperformed The S&P 500
YMAX offers a high distribution yield of around 66%, making it attractive for income investors despite its short performance history and potential NAV decay. The fund's strategy involves diverse holdings in various YieldMax option ETFs, reducing single stock risk but limiting upside potential due to its options strategy. YMAX's tech-heavy focus can be risky, especially if the sector downturns and its high yield may have significant tax consequences.
