"With a market capitalization approaching $4 trillion, Apple ( NASDAQ:AAPL | AAPL Price Prediction) is an absolute dominator among technology gadget producers. Without a doubt, Apple sells plenty of iPhones and rakes in a boatload of revenue - but for passive income investors, AAPL stock isn't extremely generous. To be honest, Apple's 0.4% forward annual dividend yield isn't anything to write home about. However, maybe the popular exchange traded fund (ETF) provider YieldMax has a solution for yield-seeking Apple fans."
"To sum it up quickly, the YieldMax AAPL Option Income Strategy ETF ( NYSEARCA:APLY) uses options to indirectly invest in Apple stock. The fund attempts to extract much greater passive income than you would expect from directly owning Apple shares and collecting the quarterly dividends. Immediately, we can identify a drawback with the APLY ETF. Specifically, it subtracts 1.06% worth of annualized operating expenses from the share price."
Apple's stock offers a 0.4% forward annual dividend yield despite a near-$4 trillion market capitalization and strong iPhone revenue. The YieldMax AAPL Option Income Strategy ETF (APLY) uses options to gain indirect exposure to Apple and to generate much higher distributable income. APLY advertises a 70.75% annualized distribution rate while charging 1.06% in annualized operating expenses. Distributions are periodically subtracted from the ETF's share price and paid as cash to shareholders. The strategy produces substantially higher cash yield but introduces option-related mechanics, higher fees, and controversy around the issuer and product suitability for income investors.
Read at 24/7 Wall St.
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