"The YieldMax Ultra Option Income Strategy ETF (NYSEARCA: ULTY) has polarized many DIY investors who have bought it for dividend income since its launch in February, 2024 at $20.00. The YieldMax success formula with its Nvidia and MicroStrategy covered call ETFs (NVDY and MSTY), by adding a hefty monthly dividend component to an ETF that tracked and shared a portion of the referenced stock's market upside, already had attracted billions of investment dollars."
"Unfortunately, ULTY experienced growing pains. The capital appreciation side has never truly kicked in, and shareholders have yet to recoup their investments through dividends since ULTY's inception in February, 2024. In its first 12 months, ULTY lost a net -2.25% when factoring in the large dividends, otherwise the drop was substantially steeper (60%) when judging solely by market price. The monthly option premiums and additional investment inflows proved insufficient to offset NAV erosion."
YieldMax launched ULTY in February 2024 at $20.00 as an ultra option income ETF aiming to combine covered-call income across roughly 30 volatile stocks to generate hefty monthly dividends. The fund leveraged YieldMax's prior covered-call successes with NVDY and MSTY to attract substantial investor inflows. The ETF experienced severe NAV erosion: about a 60% market-price decline and a net -2.25% total return in the first 12 months when accounting for dividends. Monthly option premiums and new inflows could not offset losses, and shareholders have yet to recoup initial investments through dividends. Market volatility and tariff-related headwinds pushed the stock sideways and polarized investors.
Read at 24/7 Wall St.
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