YieldMax Universe Fund of Option Income ETFs (YMAX)
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CXA 
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.
YMAX: Is This 43% Dividend Yield Sustainable?
YieldMax Universe Fund is a diversified fund-of-funds that invests in other YieldMax call-selling ETFs, but it suffers from principal decay and high fees. YMAX's construction leads to a double-fee structure and exposure to high beta factors, causing significant NAV erosion and underperformance compared to the indices. Despite its 43% yield, YMAX's distributions are declining over time, making the high yield unsustainable and unattractive for long-term investment.
Unveiling YMAX: Beyond The 69% Headline Yield
YMAX offers a high yield of 69% by investing in 24 YieldMax ETFs using covered call and credit spread strategies, but with high fees and capped upside. The fund's complex structure and synthetic positions lead to high turnover and transaction costs, impacting long-term returns and adding volatility. YMAX may suit aggressive income investors seeking high yields, but conservative investors might prefer traditional income options due to YMAX's volatility and high fees.
Avoid YMAX: High Fees And Bad Strategy
YieldMax's YMAX ETF offers high yields but has risks due to its complex fee structure and capped upside from covered call strategies. The fund's high turnover from synthetic exposure and call credit spreads means more transaction costs which eat into investor capital. The approximate cumulative result of YMAX's exposure to component YieldMax ETFs and monthly rebalancing is a short volatility, short dispersion product. Pros and cons discussed.
YMAX: You're Better Off Just Buying Stocks
YieldMax ETFs, including YMAX, generate income from options strategies but cap upside gains and don't limit downside risks, making them risky for long-term income investors. YMAX's high distribution rate of 62.4% is misleading, as total returns have underperformed broader market indices like QQQ and SPY since February. The fund's reliance on options premiums makes it vulnerable to market declines, with total returns quickly falling apart during stock market drawdowns.
YMAX: Weakness Of Strategy On Full Display
YMAX ETF's covered-call strategy limits upside and exposes investors to significant single-stock risks, leading to long-term underperformance and high volatility. The fund has delivered -8% total returns recently, with a 22% share price drop, highlighting the strategy's flaws in volatile markets. Investors should avoid YMAX due to its loser's game strategy, which fails to mitigate single stock risks and underperforms in non-bull markets.
YMAX: Diversification Makes This Strategy Attractive
YieldMax Universe Fund of Option Income ETFs holds 22 YieldMax income ETFs on single stocks and indices. YMAX advertises a massive yield of over 60%, drawing much investor excitement and attention. Unlike other YieldMax ETFs I have reviewed, I find some redeeming attributes in YMAX that make it attractive.
YMAX: One Of The Best Covered-Call Funds
Covered call funds like YieldMax Universe Fund of Option Income ETFs have become a common form of financial investment in the last decade. YMAX has offered investors total returns of 14.28% since January, slightly lower than the S&P 500's total returns of 17.37%. The Fund uses an options strategy to minimize net asset value decline and focus on specific stocks with higher beta for better long-term income.
