Best YieldMax ETFs to Invest in Now

If you're looking to boost your income with high-yielding investments, YieldMax ETFs are a great place to start. They offer a unique combination of dividend income and capital appreciation, making them an attractive option for income-seeking investors.

YieldMax ETFs track a specific index or strategy, such as dividend-yielding stocks or bonds, and offer a diversified portfolio with a single investment. For example, the Vanguard Dividend Appreciation ETF (VIG) tracks the Nasdaq U.S. Dividend Achievers Index, which is made up of 184 stocks with a history of consistently increasing their dividend payments.

Investing in YieldMax ETFs can be a low-maintenance way to generate income, as they often come with lower fees compared to actively managed funds. This is because ETFs are designed to track a specific index or strategy, rather than being actively managed by a fund manager.

The YieldMax ETFs are known for offering attractive dividend yields, often ranging from 20% to over 40%, which is achieved through options strategies beyond traditional dividends. This is a major reason why investors choose YieldMax ETFs.

Some of the most popular YieldMax ETFs include the YieldMax Universe Fund of Option Income ETFs (YMAX), which has returned 14.28% since January, slightly trailing the S&P 500's 17.37%. This fund sells out-of-the-money calls and reinvests proceeds into income-producing assets like government bonds.

The YieldMax TSLA Option Income Strategy ETF (TSLY) utilizes covered call options on Tesla stock to generate high yield while maintaining exposure to Tesla's growth potential, with a distribution rate of 83.57%. This ETF is a great option for those who want to benefit from Tesla's stability and growth.

Here are some of the popular YieldMax ETFs, categorized by their focus and strategies:

These YieldMax ETFs often invest across various sectors, including technology, healthcare, consumer goods, and more, offering broad exposure and reducing single-stock risk.

YieldMax ETFs are known for offering attractive dividend yields, often ranging from 20% to over 40%.

The key to their success lies in the options strategies used to generate premium income.

Selling call options on the underlying stocks held by the ETF is a major options strategy used by most YieldMax ETFs.

This approach allows them to replicate the performance of underlying stocks using synthetic options strategies.

The SPDR Bloomberg High Yield Bond ETF (JNK) is a popular way to access high-yield bonds, but YieldMax ETFs are a different beast altogether.

They offer a way to tap into income through options strategies, rather than traditional dividends.

Some YieldMax ETFs use call options to generate premium income, while others use synthetic options strategies to replicate the performance of underlying stocks.

These strategies can be complex, but the end result is often a higher dividend yield for investors.

Here's a brief comparison of the SPDR Bloomberg High Yield Bond ETF (JNK) and YieldMax ETFs:

Keep in mind that YieldMax ETFs often come with higher risks and complexities, but they can also offer higher rewards for investors willing to take on that risk.

The performance of YieldMax ETFs can be compared side by side using the DRIPCalc PRO stocks comparison tool, which provides detailed information on total returns, dividends, earnings, expenses, buybacks, EPS, P/E ratio, and more.

YieldMax ETFs have performed better than Kurv Invest ETFs, with some YieldMax ETFs showing significant gains in the past 149 days, such as Netflix's NFLP, which has increased by 28.83%.

Kurv Invest ETFs, on the other hand, have chosen higher strike prices, allowing for more upside potential with the underlying stock, but resulting in lower premiums for option contracts and lower yields.

The best-performing YieldMax funds over the past 12 months include those with total returns of over 100%, such as Netflix's NFLP, which has increased by 28.83% in the past 149 days.

Some YieldMax ETFs, like MSF, have shown an increase of 13.84% in the past 149 days, while others, like TSLP, have experienced a decline of 20.5%.

To compare the performance of different YieldMax funds, you can use the DRIPCalc PRO stocks comparison tool. This tool provides detailed information on the performance of two stocks or ETFs side by side, over different time periods, including total returns, dividends, earnings, expenses, buybacks, EPS, P/E ratio, and dividend-oriented dividend payout and dividend to free cash flow ratios.

The tool offers various time periods for comparison, and you can also filter the results to see the performance of specific funds or ETFs. For example, you can compare the performance of a YieldMax ETF with a Kurv Invest ETF, or compare the performance of different YieldMax funds.

Some of the key metrics you can compare include the 1Y / TTM Return, which is the total return of the share price plus dividends collected, and the 1Y / TTM DRIP, which is similar to the 1Y / TTM Return but implies reinvesting dividends on the payout date at the close price of each fund on that day.

Here's a summary of the key metrics you can compare:

Keep in mind that most YieldMax funds are less than 1 year old, so the 1Y returns and CAGR are calculated since inception. This means that the performance metrics may not reflect the full 12-month period, but rather the performance since the fund was launched.

When evaluating the performance of YieldMax funds, it's essential to look at the worst performers. The 3 Worst YieldMax Performers list shows the funds with the lowest returns over the past 12 months.

These funds have struggled to deliver, with returns that are significantly lower than their peers. According to the data, these funds have the lowest performance.

The list highlights YieldMax funds that have underperformed, making it crucial for investors to carefully consider their options.

YieldMax ETFs are known for offering attractive dividend yields, often ranging from 20% to over 40%, which is achieved through options strategies beyond traditional dividends.

There are two main types of YieldMax ETFs: individual stock ETFs and parent ETFs. Individual stock ETFs, such as TSLY, hold synthetic shares of underlying assets and use a synthetic covered call strategy to generate income.

Parent ETFs, such as YMAX and YMAG, hold individual YieldMax funds as a portfolio and have a higher expense ratio of 1.28%.

These parent ETFs are too new to list in tables, but they have an expected 1st dividend payment in Feb 2024, which will be around 38-40% Forward Yield.

Here are some key facts about YieldMax ETFs:

Options income funds are a type of YieldMax ETF that generates income by selling call options on underlying assets. They use options strategies to replicate the performance of the underlying stocks, often with attractive dividend yields ranging from 20% to over 40%.

These funds are known for their high-volatility and are considered "very risky" investments. They track individual underlying assets, such as MSFT, NVDA, and AMZN, and use synthetic options strategies to replicate the performance of these stocks.

One of the major options strategies used by these funds is selling call options on the underlying stocks, which generates premium income. Most YieldMax ETFs use synthetic options strategies to replicate the performance of the underlying stocks.

YieldMax funds also use a "synthetic covered call strategy" to generate income. This involves buying at-the-money call options and selling at-the-money put options with the same expiration date, creating synthetic shares of the underlying stock for virtually no cost.

The funds then sell out-of-the-money covered call options to generate income. For example, TSLY, one of the largest YieldMax funds, uses this strategy to generate income by selling weekly call options on synthetic shares of Tesla stock.

Another key aspect of options income funds is their expense ratio. Most individual stock YieldMax ETFs have an expense ratio of 0.99%, which means that for every $100 the fund earns, they keep $0.99.

Here are some key characteristics of options income funds:

Overall, options income funds are a type of YieldMax ETF that uses options strategies to generate income and offer attractive dividend yields. However, they are considered high-risk investments and require careful consideration before investing.

High-yield bonds are a popular way to tap into income, and the SPDR Bloomberg High Yield Bond ETF (JNK) is one of the most popular ways to access this corner of Wall Street. It has over $7.9 billion in assets under management.

The ETF's portfolio is made up of about 1,200 high-yield bonds from distressed corporations, including privately held companies. These companies pay significantly higher interest levels on their debts to offset the elevated risk.

The SPDR Bloomberg High Yield Bond ETF (JNK) provides big-time payouts, making it hard to argue with its yields. Its SEC yield is 6.9%.

Here are some key stats about the SPDR Bloomberg High Yield Bond ETF (JNK):

Investors seeking high-yield ETFs may also want to consider the Invesco CEF Income Composite ETF (PCEF), which provides a way to invest in closed-end funds via a single, diversified position. However, it's worth noting that PCEF is the most expensive of the high-yield ETFs discussed here, with expenses of 3.08%.

The Invesco CEF Income Composite ETF (PCEF) is made up of 110 different securities, each operating like private investment funds. It provides a big-time yield, but its high expenses are a drawback.

These high-yield ETFs are worth considering if you're willing to take on some risk, as they offer yields of at least 6%, which easily outpaces the S&P 500.

To qualify as one of the best high-yield ETFs, a fund must have at least $250 million in assets under management and be well-established.

Keep in mind that dividend yields on equity ETFs represent the trailing 12-month yield, which is a standard measure for stock funds, and there's no guarantee that future distributions will keep up.

YieldMax ETFs offer a unique approach to generating income, using options-based strategies to trade on underlying securities and profit from premiums received.

This approach allows YieldMax ETFs to produce income from assets not typically linked to earnings, making them a valuable addition to any investor's portfolio.

These funds are structured to perform across a range of market conditions, making them an attractive choice for investors seeking an income stream during market volatility.

We looked for funds that offer yields of at least 6%, which is significantly higher than the yield of the S&P 500. This generous approach to income is a key characteristic of the high-yield ETFs we recommend.

In our research, we found that some ETFs have much higher dividend yields, with the Invesco CEF Income Composite ETF (PCEF) offering an impressive 8.7% yield and the VanEck Mortgage REIT Income ETF (MORT) and Global X SuperDividend ETF (SDIV) both offering a 10.8% yield.

To ensure that these high-yield ETFs are stable and reliable, we also considered the amount of assets under management. We looked for funds with at least $250 million in assets, which provides a level of security and stability.

Here are the high-yield ETFs we considered, listed in order of their dividend yield:

The expense ratio of an ETF can have a significant impact on your investment returns over time.

ETFs with high expense ratios, like YieldMax ETFs, can eat into your gains. For example, the YMAX ETF has a gross expense ratio of 1.28% as of August 2, 2024.

High expense ratios can add up quickly, especially in long-term compounding. Even a high annual yield may not be enough to offset the costs.

It's essential to consider the expense ratio when evaluating ETFs, especially if you're investing for the long haul. Established ETFs like the S&P 500 charge significantly less, with expenses under 10 basis points.

In flat or declining markets, covered call writing tends to be more beneficial as high premiums can offset losses or stabilize income.

The BXM Index consistently outperformed the S&P 500 from 1988 to 2015 in terms of risk-adjusted returns, especially in flat or declining markets.

However, this advantage doesn't hold true after 2015, as seen in the performance comparison between SPY and XYLD.

Covered call writing tends to be less beneficial in rising markets due to capped upside, as gains above the strike price are not realized.

In fact, the BXM only outperformed the S&P 500 Index in just four of the 19 calendar years, according to a study by First Trust Portfolios.

This strategy may be most beneficial when stock market returns are low, such as in 2008, or when returns range from 0% to 10%, like in 2007, 2011, and 2015.

However, in years with high returns above 10%, covered call writing tends to underperform.

YieldMax ETFs offer a dependable source of income, providing investors with a monthly income flow that contributes from securities.

These funds are structured to perform across a range of market conditions, making them an attractive choice for investors seeking an income stream.

One of the significant benefits of YieldMax ETFs is their capability to offer investors a source of income during market volatility.

They utilize options-based strategies for generating income by trading options on the underlying securities and profiting from the premiums received.

This strategy is a good fit for investors who are willing to sell their shares at a specific strike price and seek income through selling call options when the prices of stocks or ETFs face difficulty to increase.

YieldMax ETFs can bring stable income when the price fluctuates, only if it is stable or rises slightly.

Investors can benefit from the income produced by YieldMax ETFs, especially in a portfolio that lacks assets linked to earnings.