YieldMax ETFs: High-Yield, High-Risk Income Strategies

YieldMax ETFs have made waves with their eye-popping yields and unique approach to income generation. But do these headline-grabbing numbers translate into long-term value for investors?

Here’s what you need to know about YieldMax ETFs—plus a detailed comparison with established ETF brands like iShares, Vanguard, Invesco, and WisdomTree.

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YieldMax ETFs offer exceptionally high yields by using options strategies on single stocks or sectors. However, these high yields come with significant risk and recent negative total returns. Investors should weigh these factors against the steadier, long-term growth offered by traditional ETF providers.

What Are YieldMax ETFs?

YieldMax ETFs are actively managed funds designed to generate high monthly income by selling covered call options on individual stocks or indexes.

Each ETF typically targets a single, high-profile company—like Tesla, Nvidia, or Coinbase—or a sector, using a synthetic covered call strategy. These funds aim to deliver outsized yields, often exceeding 90% annually, but with capped upside and significant downside risk.

How YieldMax ETFs Work:

Sell call options on a target stock or sector.
Collect premiums, which are distributed as high monthly income.
Accept capped gains if the underlying stock surges.
Exposed to losses if the underlying stock falls sharply.

List of YieldMax ETFs

Here are some of the most popular YieldMax ETFs, with links to their profile pages for more details:

How Have YieldMax ETFs Performed?

Despite their high yields, YieldMax ETFs have struggled to deliver positive total returns. Here’s a breakdown of the most notable funds:

YieldMax MSTR Option Income Strategy ETF (MSTY)

Dividend Yield: 141.52%
1-Year Return: -41.14%
Assets: $4.41 billion
Expense Ratio: 0.99%
Strategy: Synthetic covered calls on MicroStrategy (MSTR).

YieldMax NVDA Option Income Strategy ETF (NVDY)

Dividend Yield: 93.34%
1-Year Return: -47.50%
Assets: $1.51 billion
Expense Ratio: 1.27%
Strategy: Synthetic covered calls on Nvidia (NVDA).

YieldMax TSLA Option Income Strategy ETF (TSLY)

Yield: Data not specified, but designed for high monthly income
Recent Returns: -3.49% (NAV), -2.99% (Market Price) over the most recent period
Strategy: Covered calls on Tesla (TSLA).

YieldMax COIN Option Income Strategy ETF (CONY)

Best 3 Months: +47.17%
Worst 3 Months: -41.18%
Recent 1-Year Return: -18.4%
Strategy: Covered calls on Coinbase (COIN)4.

YieldMax Ultra Option Income Strategy ETF (ULTY)

Dividend Yield: 143.29%
1-Year Return: -56.73%
Assets: $368 million
Expense Ratio: 1.30%
Strategy: Covered calls across a broad equity basket5.

Why Are YieldMax ETF Yields So High?

YieldMax ETFs generate income by selling call options—essentially giving up some upside potential in exchange for cash premiums. When volatility is high or the underlying stock is in demand, option premiums rise, boosting the ETF’s yield. However, if the underlying stock falls, the capital losses can quickly outweigh the income, leading to negative total returns.

How Do YieldMax ETFs Compare to iShares, Vanguard, Invesco, and WisdomTree?

To put YieldMax’s performance in context, let’s compare them to some of the most popular ETFs from established brands.

Performance Comparison Table

ETF Name	1-Year Return	5-Year Annualized	10-Year Annualized	Dividend Yield	Expense Ratio	Strategy
YieldMax MSTY	-41.14%1	n/a	n/a	141.52%1	0.99%1	Covered calls on MSTR
YieldMax NVDY	-47.50%2	n/a	n/a	93.34%2	1.27%2	Covered calls on NVDA
YieldMax TSLY	-3.49% (NAV)3	n/a	n/a	High	0.99%	Covered calls on TSLA
YieldMax CONY	-18.4%4	n/a	n/a	High	0.99%	Covered calls on COIN
YieldMax ULTY	-56.73%5	n/a	n/a	143.29%5	1.30%5	Covered calls, broad
iShares Core S&P 500 (IVV)	13.25%6 10	15.90%6	12.81%6	~1.5%	0.03%10	S&P 500 index
Vanguard S&P 500 (VOO)	Similar to IVV	10.28%7	12.81%6 7	~1.5%	0.03%	S&P 500 index
Invesco S&P 500 High Beta (SPHB)	6.50%8	11.26%8	10.96%8	~1.5%	0.25%	High beta S&P 500
WisdomTree U.S. Quality Dividend Growth (DGRW)	11.46% (10-yr)9	8.86% (5-yr)9	10.91% (10-yr)9	~2%	0.28%	Dividend growth

What Explains the Performance Gap?

YieldMax ETFs:

High Yields, High Risk: The yields are eye-catching, but the underlying capital is at risk. If the underlying stock falls, losses can quickly erase the income.
Negative Returns: Most YieldMax ETFs have posted double-digit negative returns over the past year, despite distributing high monthly income¹ ² ⁵.

Traditional ETFs (iShares, Vanguard, Invesco, WisdomTree):

Steady Growth: S&P 500 ETFs like IVV and VOO have delivered annualized returns of 10–13% over the past decade, with much lower volatility and risk⁶ ⁷ ¹⁰.
Lower Yields: Dividend yields are modest (1.5–2%), but capital appreciation drives total returns.
Lower Fees: Expense ratios are typically 0.03–0.28%, far below YieldMax’s 0.99–1.30%¹⁰ ⁷ ⁸ ⁹.

How does YieldMax ETF performance compare to iShares and Vanguard ETFs over the past year?

YieldMax ETFs have delivered notably different results compared to iShares and Vanguard ETFs over the past year. YieldMax’s approach—using covered call options on volatile, single stocks—has produced extremely high yields, but also steep capital losses.

In contrast, iShares and Vanguard’s flagship broad-market ETFs have continued to deliver steady, positive returns with much lower risk.

YieldMax ETF Performance (Past Year)

YieldMax MSTR Option Income Strategy ETF (MSTY):
- 1-Year Return: -41.14%
- Dividend Yield: 141.52%
YieldMax NVDA Option Income Strategy ETF (NVDY):
- 1-Year Return: -47.50%
- Dividend Yield: 93.34%
YieldMax TSLA Option Income Strategy ETF (TSLY):
- Recent 1-Year Return: -3.49% (NAV), -2.99% (Market Price)
YieldMax COIN Option Income Strategy ETF (CONY):
- 1-Year Return: -18.4%
YieldMax Ultra Option Income Strategy ETF (ULTY):
- 1-Year Return: -56.73%
- Dividend Yield: 143.29%

These ETFs paid out exceptionally high monthly income, but the underlying value of the funds dropped sharply—often by 40% or more—over the past year.

iShares & Vanguard ETF Performance (Past Year)

iShares Core S&P 500 ETF (IVV):
- 1-Year Return: ~13.25%
Vanguard S&P 500 ETF (VOO):
- 1-Year Return: ~13.2%

Both IVV and VOO track the S&P 500 and have benefited from the broad market’s strong performance, delivering solid positive returns with low volatility and low expense ratios.

Key Differences

ETF Brand	Typical 1-Year Return	Yield	Risk Level	Expense Ratio
YieldMax	-3% to -57%	90%+	Very High	~1%+
iShares (IVV)	~13%	~1.5%	Low	0.03%
Vanguard (VOO)	~13%	~1.5%	Low	0.03%

YieldMax: Extremely high yields, but negative total returns due to large capital losses. High volatility, concentrated in single stocks.
iShares/Vanguard: Steady, positive returns, low yields, low risk, and minimal fees. Broad diversification.

Bottom Line

Over the past year, YieldMax ETFs have underperformed iShares and Vanguard ETFs by a wide margin. While YieldMax funds offer high income, their negative total returns highlight the risk of chasing yield at the expense of capital preservation. For most investors, iShares and Vanguard’s broad-market ETFs have provided a much better balance of risk and reward.

Frequently Asked Questions

How do YieldMax ETFs generate such high yields?

YieldMax ETFs sell covered call options on single stocks or sectors. The premiums from these options are distributed as income, resulting in very high yields. However, this strategy caps upside gains and exposes investors to losses if the underlying stock falls¹ ² ³ ⁵.

Are YieldMax ETFs good for long-term investing?

The recent history suggests caution. While the monthly income is attractive, the negative total returns indicate that capital losses can quickly overwhelm the yield. For long-term investors, broad-market ETFs like IVV or VOO have historically delivered better risk-adjusted returns⁶ ⁷ ¹⁰.

What are the risks of YieldMax ETFs?

Single-Stock Exposure: Most YieldMax ETFs are tied to the performance of one company, increasing concentration risk.
Volatility: The underlying stocks (Tesla, Nvidia, MicroStrategy, Coinbase) are highly volatile, amplifying both income and potential losses.
Capped Upside: The covered call strategy limits participation in big rallies.
High Fees: Expense ratios are much higher than index ETFs.

How do the fees compare?

YieldMax ETFs charge between 0.99% and 1.30% in annual expenses¹ ² ⁵. By contrast, iShares and Vanguard S&P 500 ETFs charge just 0.03%¹⁰ ⁷.

How do WisdomTree and Invesco compare?

WisdomTree and Invesco offer specialized strategies—like dividend growth or high-beta S&P 500 exposure—with long-term annualized returns between 8–11% and moderate yields⁸ ⁹. Their risk and fee profiles are more in line with traditional index funds.

What factors contributed to MSTY’s recent -41.14% return despite high dividend yields?

MSTY’s -41.14% return is primarily a result of steep declines in MicroStrategy’s share price, the limitations of its options-based income strategy (capped upside, full downside), and the psychological dividend trap where high yields mask significant capital erosion. Investors attracted by the headline yield often overlook these structural risks, which have led to substantial losses despite the impressive income stream⁵ ⁶.

Should You Buy YieldMax ETFs?

YieldMax ETFs are best suited for:

Experienced investors seeking high monthly income and willing to accept significant risk.
Those who understand options strategies and the risks of single-stock concentration.

They are not ideal for:

Long-term, buy-and-hold investors seeking steady growth.
Investors who prioritize capital preservation and low fees.

Conclusion

YieldMax ETFs deliver on their promise of high yields, but at a steep cost—recent negative total returns and high volatility. For most investors, established ETFs from iShares, Vanguard, Invesco, or WisdomTree offer a better balance of risk, return, and cost. If you’re considering YieldMax, make sure you understand both the mechanics and the risks before jumping in.

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