YieldMax Universe Fo in ETFs (YMAX)
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YMAX Dishes Out a 60% Yield Across ETFs—Time to Buy?
Key Points in This Article: YieldMax Universe Fund of Option Income ETFs‘ (YMAX) 60.77% yield, driven by covered call strategies on volatile tech stocks, attracts income seekers in today's turbulent market.
YMAX: You May Not Get Your Money Back
YMAX offers attractive weekly income and diversification as a fund of funds, reducing single-stock and sector risk. Many investors aim to recover their initial investment back in distributions, thereby de-risking. This may take longer than assumed.
YMAX: A 70% Yield That's Mostly Illusion - Here's Why I'd Sell
YieldMax Universe Fund of Option Income ETFs' high yield is mostly a return of your own capital, not true income, which erodes your investment over time. The fund's structure limits upside in strong markets and exposes you to losses in weak markets, with no real downside protection. Most investors misunderstand YMAX's payouts, mistaking principal return for genuine income, and face unfavorable tax consequences.
YMAX: Weekly Dividend Income Yielding Over 50% Annually Comes At A Cost
YMAX offers exceptionally high yields, but these are largely offset by significant share price declines and NAV erosion due to its synthetic options strategy. The fund's distributions are mostly return of capital, raising concerns about sustainability and long-term value for income-focused investors. While YMAX has outperformed SPY in total return over the past year, I prefer more stable alternatives like QQQI for income investing.
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
YieldMaxâ„¢ 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.
