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.
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.
By confounding income-driven dividends and capital distributions, option-income strategy ETFs are often mismarketed to income investors, leading to risk and return profile misunderstandings. YieldMax Universe Fund of Option Income ETFs is a "fund of funds of funds" on a pool of investment products. YMAX investors pay not only its management fee but also the fees of the underlying YieldMax ETFs, giving it a high overall expense ratio of 1.28%.
YieldMax Universe Fund of Option Income ETFs is an ETF. The fund falls in the "fund of funds" category, meaning that it will primarily invest in other YieldMax ETFs. The ETF's 44% distribution rate is achieved through option strategies on underlying stocks, but the rate is not fixed and depends on market performance. YMAX's total return in 2024 closely resembles holding its underlying stocks, and the ETF needs to be analyzed from a total return perspective.
YMAX is an income investment "fund of funds" using a blend of traditional and synthetic covered call strategies generating a TTM yield of 16%+. YMAX is a diversified options ETF and has demonstrated risk mitigation in spreading its holdings across multiple YieldMax ETFs. Despite impressive returns by the fund and it's underlying holdings, the fund's performance in varying market conditions remains untested, driving a "Hold" rating.
YMAX is an ETF that offers income-focused investors exposure to hot and high-growth markets like AI chips and Bitcoin. The ETF is equal-weighted and diversifies the volatility of its individual YieldMax Option Income ETF holdings. YMAX has a high dividend with a yield of over 40% by estimation and is a potential alternative for income investors seeking high-income, safe, low-risk investment alternatives.