The YieldMax ETFs Are in Trouble - TSLY, NVDY, CONY

Within the high yield, income investing realm, easily one of the most discussed investment providers that exist has been YieldMax. Since their founding less than two years ago, this company has already launched 20 ETFs over the course of just 14 months. Their exchange-traded funds have been popular among some investors who are seeking high income, particularly for their eye popping dividend yields. The majority of their funds currently have dividend yields that exceed 20%, with some yielding much more than that. Their most popular ETF in terms of assets under management, TSLY, has at times offered a dividend yield that exceeds 70%, which obviously has been a draw for people seeking high income.

I’ve also covered and gone in depth on a handful of their funds, including TSLY, NVDY, and CONY. All of their ETFs use the same distinct covered call strategy, which is often referred to as a Poor Man's Covered Call tactic. This unique strategy that isn’t used by other covered call ETFs, is known to come with serious downside risk, and can wreck havoc on the share price of their funds. Last week YieldMax issued a press release regarding one of their ETFs, which I think implies just how poor their funds can be in terms of being long term holdings. And I think all shareholders and people who are considering their funds should be made well aware of what’s going on.

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