"In the era of artificial intelligence (AI), NVIDIA ( NASDAQ:NVDA | NVDA Price Prediction) remains an unstoppable processor powerhouse and a darling of the stock market. With that, it certainly seems like any fund associated with NVIDIA must be massively profitable and absolutely fail-safe. Addressing the demand for stock-specific exchange traded funds (ETFs), YieldMax offers a passive-income-generating fund for NVIDIA stock optimists."
"To scratch the itch for big yield, you may consider the YieldMax NVDA Option Income Strategy ETF ( NYSEARCA:NVDY). This YieldMax fund doesn't directly hold NVIDIA shares, but it replicates share ownership through synthetic option strategies. That's fine, but be aware that the NVDY ETF subtracts 1.27% worth of annualized operating expenses from the share price. So already, you'll be at a disadvantage when compared to simply holding NVIDIA stock shares, which don't deduct operating expenses."
NVIDIA has delivered substantial share-price gains but a negligible 0.02% forward annual dividend yield. YieldMax offers the NVDA Option Income Strategy ETF (NVDY) to generate passive income for NVIDIA optimists by replicating ownership through synthetic option strategies rather than holding shares directly. The NVDY ETF advertises a 38.73% annual distribution rate but charges 1.27% in annualized operating expenses, creating a performance drag compared with direct NVDA ownership. Synthetic replication and high advertised yields carry drawbacks and potential risks for income-seeking investors who must monitor distributions and understand expense and strategy implications.
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