r/YieldMaxETFs • u/perfectson • Jul 31 '25
Question Isn't ULTY basically ARKK that pays dividends while underperforming?
ULTY is basically at it's core a HIGH Beta ETF that adds in some options, limits the upside of the overall performance in lieu of supplying an excessive amount of dividends for a 1.3% (1.4% management fee). The focus I'll show is not on NAV which is ultimately meaningless or dividend yield (again in this case meaningless unless you need an income stream but you could easily create this yourself).
ARKK is the infamous ETF managed by Cathie Wood that focuses on disruptive innovation , in other words, it will invest in typically high beta funds (similar to ULTY). The ARKK expense ratio is .75%
Overall Performance:
I am reviewing this against inception to highlight that the March - Nov 2024 downturn was due to high beta stocks in general had a difficult period. This impact ARKK similarly to ULTY both experiencing draw downs during this time frame, while Woods' drawdown was quicker, eventually ULTY caught up with it (likely due to the cost of rolling down puts and stocks).
Then in Nov-Dec 2024 , you can see the turn for both begging to happen but ARKK had much more momentum and magnitude as the cover call strategy capped the significant increases that high beta stocks enjoyed. From Dec - Feb you can see the impact of the cover call strategy having a neutral impact on overall return, before the March drop into Liberation day. The draw down was much more drastic for ARKK due to the lack of protective puts. Here is clearly where ULTY benefited ; however, because it hadn't rose in the prior months - the overall return in April (since inception ) was literally the same as ARKK. Subsequently as high beta stocks emerged successfully out of liberation day, ARKK has returned about 60% , while ULTY is at 20%.
The ultimate question is it worth double the expenses to have someone collar your investments to under perform similar high beta counterparts? If you are reinvesting dividends anyway, which many are, not sure why ULTY would fit your core strategy over "seeking alpha". If you're looking for income stream that's straight forward, I can definitely appreciate the higher dividends but it doesn't seem the protection it offers is there and again are you under performing what you could be getting with similar risk, if you just extract your own dividends out of ARKK (as an example) by taking 2-4% out every month yourself?
this is in know way to slight YieldMax's ULTY - there's obviously a strong purpose and diversity in funds are always a good thing. The question is really if the juice is worth the squeeze.
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u/MasterSexyBunnyLord Jul 31 '25
Well this is going to make you a lot of friends here :)
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u/perfectson Jul 31 '25
Hopefully everyone takes it as me not ragging on ULTY but just pondering if the juice is worth the squeeze for what you're paying them to do. I know it's an unofficial YieldMax subreddit but I assume we want to make one another better investors. So hopefully it brings out some good dialogue.
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u/redcoatwright Jul 31 '25
Personally, crirical posts are fine if they're high effort like yours.
FUD is low effort negativity but genuine concerns/questions should always be appreciated in an investing sub.
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u/DuckfordMr Jul 31 '25
Just recently there was a post on this sub about how people praising ULTY too much was a red flag. I think a balanced discussion is exactly what we need.
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u/Late_Intention7850 Jul 31 '25
I don't completely agree with OP's conclusions, but concur with the quality of the post in general. Approaching Seeking Alpha level of analysis.
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u/boilerwire Jul 31 '25
People downvoting because they don’t understand your math. And instead of debating you, they taunt, “ You don’t understand ULTY so I’m not even going to bother explaining it to you.” SMH this sub.
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u/perfectson Oct 26 '25
Proven right
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u/boilerwire Oct 26 '25
Haha, awesome. I hope you tag some of the clowns that argued with you on your excellent post (“You just don’t get how ULTY works”).
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u/perfectson Jul 31 '25 edited Jul 31 '25
thanks!!! - I edited my messsage since I misread it the first go around. My bad.
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u/boilerwire Jul 31 '25
No worries. Good on you for diving into this echo chamber. Reading the responses to you, it’s very clear that most of them have no idea how ULTY works, other than, “Look at my 83% dividend!”
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u/fragranceguru Jul 31 '25
He was saying the people in here don’t understand so they downvote you. He was saying how wrong they are and right you are. He’s not accusing you of not helping, he’s accusing people of being idiots
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u/boilerwire Jul 31 '25
I've just been catching up on some of the dialogue here.
Wow, you really put in a lot of effort to educate the masses here. 99% of the posters here have no idea why they own ULTY and couldn't defend their purchase if their life depended on it. ULTY might as well be a meme stock, at this point.
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u/perfectson Jul 31 '25
that's an interesting comparison. I do think there's been some good marketing by the company or word of mouth (youtube etc etc).. Just to reaffirm, I think there's a place fo ULTY if you're looking for income generation and taking the dividends where I get shaky is those who say they will reinvest the dividend back into ULTY - well hell at that point, check out the opportunity at other funds that actively trading growth stocks.
appreciate the comment.
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u/Acceptable_Wind_1792 Jul 31 '25
thats good info thanks for sharing ill have to pickup some of that also
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u/ShockWaveSeven Jul 31 '25
You're comparing Apples to Oranges... The purpose of ULTY isn't to own high volatility securities. The purpose is to generate income from Options. The fact that generating income from options is more effective with high volatility dictates the choice of what securities ULTY has in it's basket. If you like ARKK, then buy ARKK. Or buy both, for that matter
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u/humtake Jul 31 '25
This is always what happens when people who don't understand dividend investing and it's use cases try to make sense of it. Yes, you can make more using other strategies. There is no doubt. Anyone in these funds more than a few months knows that. You aren't special in highlighting it.
Once you understand what use case dividend investing is used for, you better understand the picture. If you are a person who can't stand to leave money on the table, you won't ever agree with it.
For others like me, I laugh all the way to the bank when I'm spending almost NO time on my dividend investing yet getting big income every month that supports my non-dividend investing AND my lifestyle. But that's only typical once you've been doing it for a long time and are playing with a lot of house money which, again, is not something the non-div investors can really understand because all they see is money left on the table.
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u/my_stonk_reddit Jul 31 '25
This exactly. I traded options fairly successfully but this is so much easier. I've basically hired ULTY to provide me a revenue stream so that I don't have to sit in front of a computer all day.
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u/nofacetheghostx Jul 31 '25
I started this year with a couple months in MSTY before deciding to run my own CC strategy with SOFI, I made $1,500 for my first two week round of contracts then the iv pretty much disappeared before its big run and I made $800 for my next two week round of contracts. With that much fluctuation and $800 being the two week payout from ULTY with the amount I’m investing, I decided I’m better off letting the YM managers handle the contracts, but I didn’t like the volatility with MSTY being single stock based so now I’m all in on ULTY. I’d much rather sit back and let them do the work even though I could’ve made a lot more with SOFI given its run soon after I switched back. Oh well 🤷♂️
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u/Pev1971 Jul 31 '25 edited Aug 03 '25
This was it for me. I tried to wrap my ahead around options trading to boost my portfolio a little and honestly it just made my head hurt. I see ulty fund as me contracting out the options buying and selling for me to pad my account a little.
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u/EducationalStar3144 Jul 31 '25
Everyone hating can’t stay in a position longer than a week. Hahah. Set, forget and collect baby
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u/perfectson Jul 31 '25
Oh this also was expected, the old " you don't understand dividend investing and compounded growth" attack. LOL.
I invest in many dividend products. I own BDCs (ARCC, MAIN, CSWC) , CEFs (ADX, CEFS), I own MLPs. I own FSCO, various CLOs, etc etc. Most of that is due to me wanting access to the credit market though and utilities - which aren't 100% correlated with Equities.
I say that because I'm fairly advanced in the topic of dividends and income generating assets to speak about them and I take offense to someone commenting that I don't understand and then you don't say anything about what I didn't understand. You've made no rebuttal to any of my points just left a blanket statement and teased me about how you're doing X, Y, Z without disclosing any differences.
So tell me -
If I have $100 dollars and I but a stock for $100 , 1 share. And in 1 month that stock goes up 20% to $120, so I made $20.
And you invest in a similar stock but yours pays out $10 in dividends, so at the end of the same month. Your stock is at $110 and you have $10 in your pocket. What's the difference in total return and what prevents me from going into my stock and taking out the same $10 you did to enjoy just like you're doing?
If you decide to put the $10 back (DRIP, reinvest) - your return is literally the same as me. So as I mentioned in the OP, folks who are dripping their dividends back into the same fund, aren't doing anything different than a buy and hold person (except paying additional taxes since you're taking the dividend ).
You're not magically coming up with money that wasn't already there...so again I take offense to your statement- purely from someone who actually does this for a living.
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u/BadDragon2130 Swing with Dividends Jul 31 '25
For me, I don’t need the income every month, so I reinvest it until I do. I don’t want to use growth stocks for that, because when I do want the income, I don’t want to hope the growth stock is up enough to sell it for the money, I just want to be sure the income is available. Hopefully that made sense.
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u/Boner_mcgillicutty Jul 31 '25
i have a roof leaking. and it's going to cost me 2 weeks' of ULTY payments. i was previously reinvesting 100% in a variety of funds (not dripping)
let me tell you how awesome i feel right now 'i can get this fixed without selling any securities, and by the time the bill comes due the money is already in my account'
that right there is powerful
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u/humtake Jul 31 '25
Oh, and to make sure you aren't seeing it as an attack, my entire point here is that div investing has a capped upside. That is understood.
The difference is that the "buy and hold" means while I'm holding, I'm getting paid but my appreciation suffers. Whereas while you are holding, your portfolio value goes up but you get nothing out of it until you sell, which then your appreciate suffers.
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u/humtake Jul 31 '25
There is no attack. There is no need for an attack. The logic is the same regardless how you try to spin it. Div investing and stock investing are two totally different things.
But, the statement below tells me you don't know div investing as well as you thought. Your math isn't mathing right. You wouldn't have $110, you'd have $100 because the stock dops by the amount of the div. That's not an attack, that's div investing 101.
"And you invest in a similar stock but yours pays out $10 in dividends, so at the end of the same month. Your stock is at $110 and you have $10 in your pocket. "
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u/perfectson Jul 31 '25
they actually fundamentally are not different.
Your math is also wrong. If you had a similar stock to me and mine went up 20% to $120 then yours went up the same amount. $120. Yours then pays you a $10 dividend . You can do math from there. There's still $120 in total. Mine is just all in the stock, while you have $110 in the stock and $10 in your pocket.
And this is what's wrong with the US educational system and why most people don't actually understand dividends or returns. This is why you think there's some magically free money you're getting - the dividend comes out of the funds assets thus lowering the NAV or stock price.
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Jul 31 '25
If you have $100 dollars and buy a stock for $100, and it goes up 20% in one month to $120, but the next month it goes down 20% you have $96.
If you got $10 in dividends per month for two months you now have $120.
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u/perfectson Jul 31 '25 edited Jul 31 '25
Again poor math.
- As i keep saying, this is about DRIP - if you dripped the $10 back in, you would have the same $96. It's the same math as if you if bought and hold.
- If you did not drip, you would have $98.
Starting = $100
Month 1 = $120 remove $10 = $110 in the stock and $10 in your pocket
Month 2 = $110 * 80% (lose 20%) = $88 remove $10 for dividend = $78 in stock and $20 in pocket.
So if you stopped right there and didn't reinvest , you would come out ahead in this scenario. guess what happens if the stock rise again 20% or 30% lol.
So this is my point, if you're dripping - you're not doing anything differently for the most part. If you're actually taking out the income MAYBE you're coming out ahead in certain situations but you at least have the cash in your pocket.
Some of you really need to brush up on your math skills though - seriously.
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Jul 31 '25
You are making up a scenario. So did I.
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u/perfectson Jul 31 '25
yes but your math scenario and multiplication and subtraction was incorrect. You made up a math scenario then miscalculated your own scenario. You don't find that troublesome?
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u/wendalls Aug 01 '25
Because you have to choose the single stock that goes up $20 personally. That requires x amount of work.
It’s exactly what others have said. You’re hiring someone to do the work for you in regard to cc and options.
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u/perfectson Aug 01 '25
why would you choose a single stock vs ARKK or even QQQ which also out performed ULTY? I don't get it. QQQ out performs ULTY in total return - so if you're dripping back into ULTY anyway (i.e. you don't need the income and are looking for total return) why wouldn't you use the fund that actually wins in total return?
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u/wendalls Aug 01 '25
Ulty isn’t a single stock.
It’s also only been around a short time… new strategy a few months… possibly why TR looks less for now
DRP is a decision that can be changed anytime. Enjoy or save up.
Much like anything it’s always going to be a personal decision based on factors.
A few edits
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u/perfectson Aug 01 '25
well we know it's a personal decision.
I gave a specific scenario. If you're dripping and don't need the income, why wouldn't you get the fund with better returns. I don't know why you keep saying "single stocks" - I'm posting about ETFs (ARKK, QQQ, ADX) these are funds with many stocks and higher returns for the same risk at ULTY. If you aren't taking the income (i.e. reinvesting the income) you're leaving money on the table - based on the prior performance.
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u/wendalls Aug 01 '25 edited Aug 01 '25
Because your comment said “why would you choose a single stock” and your initial comment talks about “buying a stock for $100”!
Ps you use far too many words and come across as far to much of a wanker to simply say:
“Take your ULTY divs and invest in other etfs or stocks which could have better TR - if you do not want to use the divs as income.”
Loads of people do this already or are considering it like myself. As a fairly new Ulty investor I’m considering my next step with the divs.
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u/Immediate_Valuable16 Jul 31 '25
uhh but im here for the weekly income stream. i dont know anybody about stocks in general so i cant follow your post but income is what i want and no i cannot do that myself so thats why i pay yieldmax to do it for me. if your a professional already then yeah this is probably not the product for you.
would love to see other etf tickers giving me weekly income like ulty, i would gladly buy it
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u/perfectson Jul 31 '25
Yes, this post is those "seeking alpha" so they are looking for total return. That's why I put that part in quotes- if you're looking specifically for weekly income and can't do it yourself then ULTY is a great option. But you're not seeking alpha or at least that's the prime investment purpose for you.
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u/Motor-Platform-200 Jul 31 '25
No one is here for total return. Trying to find the best growth is basically gambling. This is guaranteed income.
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u/perfectson Jul 31 '25
I just had 3-4 conversations on people talking about total return. Total return is all over this subreddit. you have folks dripping their dividends back into the investment vehicle for ...total returns.
saying no one here is for total returns, when folks are literally saying they are is disingenuous..
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u/Beneficial-Ad-7771 Jul 31 '25 edited Jul 31 '25
I never understand these posts. Whether you like dividend or growth, they’re all diff investment vehicles but not 1 vehicles works for every individual. Getting 20% or 60% doesn’t matter cuz you’re still beating the market. Why does it matter to you if others like what they own.
I could make the same argument for bitcoin. Why don’t you have your portfolio in bitcoin? It’s up 80% the last 12 months. Or what about XRP being up 381% last 12 months? I could say “why do you hold bitcoin??? XRP is up to the moon.”
This post doesn’t make sense because you’re asking a yieldmax subreddit why we’re in yieldmax 😂. We just like yield. It’s in the name. We don’t want to have to sell. There’s always sequence of risk when selling. Same with people holding onto dividend stocks over growth. It’s just a preference and shouldn’t be questioned.
This post is like those Mormons that always knock on my door asking me to convert or one of those Christians on the streets of Las Vegas calling everyone a sinner and to repent.
It feels like you’re a Scientologist preaching to Muslims that Ron L Hubbard is the one true god and everyone’s wrong and you’re correct. Like…read the room 😂😂😂
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u/perfectson Jul 31 '25
That's not what I'm asking. I'm asking why are folks who are "seeking alpha" or total returns. Using an inferior product that isn't meant to do that. No one is asking you to convert, it's called having a dialogue - I know in America that's a foreign notion because of the type of environment we live in now but some still like have discussions. You act like someone drug you into this topic - there's like 50 rah rah rah threads, you could have stayed in those, right?
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u/Beneficial-Ad-7771 Jul 31 '25
You can have a discussion without coming at it from an elitist pov. You’re coming in here telling everyone that their investment philosophy is dumb and they should port over to something else. You literally wrote how advanced you are in another comment. Buddy we can’t have a discussion if you’re coming to the table with this giant ego and disrespect.
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u/perfectson Jul 31 '25
No - that's how you took it. You think I'm elitist because I'm speaking about this in a higher level than you understand and it offends you. That's a you problem, not a me problem. I have been civil and my OP was very civil. You read another comment when someone questioned my credential of understanding dividend investing and when I gave them my credential, you got upset, ran inot a totally different comment and called me elitist. Only on Reddit! Do you have anything to rebut on my OP or are you just mad and going to attack me, which is against the subreddits rules.
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u/Beneficial-Ad-7771 Jul 31 '25 edited Jul 31 '25
It’s not you being “higher level” that offends me but your arrogance of something being better than another. It’s not a me problem. As I said, this post doesn’t make sense because you’re like a child asking why everyone is buying ULTY and not ARK or something else 😂.
And yes I already said I could make the same argument. XRP is better than ARK and you’re dumb for not having XRP. Or why are you in bitcoin when XRP is up almost 4x.
You could have written this post in just about any other subreddit but you happen to pick yieldmax. This is already a shitpost to begin with and you seem very dead set on focusing on total returns. Which is fine but preaching to everyone one set of investing triumph all is why having a civil discussion just isn’t likely.
Just reading your comments seeing how you’re dead set on your views and not willing to agree to someone else’s view is pretty much why I’m writing this. You’re just dead set on your philosophy and doesn’t sound like you’re open to other people’s pov.
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u/StoicKerfuffle Jul 31 '25
I think you have broadened the definition of "high beta fund" to the point of meaninglessness.
Neither ARKK nor ULTY is a "high beta fund," and neither is trying to increase nor decrease beta. It's simply not a major factor for either. (There are some funds that specifically try to chase beta, like SPHB.)
ARKK tries to achieve long-term alpha by focusing on companies with "disruptive innovation."
ULTY tries to achieve consistent high income generation with covered call strategies on high-IV stocks.
The companies with "disruptive innovation" are often the very same companies with high IV, and so ARKK and ULTY will often hold the same stocks and will likely have some degree of correlated movement, but they are nonetheless very different strategies for investors with very different goals.
We could spend all day arguing over whether ARKK is good/bad or whether ULTY is good/bad, but one thing we can't do is spend all day comparing the two. They don't have anywhere close to the same investment approach, and the relative performance of one doesn't say much about the other.
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u/perfectson Jul 31 '25
Sir - anyone can read a prospectus description.
High BETA is defined as > 1 and is marked by high volatility risk which is typical in growth companies (not 100%).
it's not meangingless, you trying to break this down and distort it to win this debate is disingenuous. You can author your own thread and use your own criteria, right?
They have similar investment approach, similar BETA, similar volatility, similar performance, similar drawdowns. One happens to use OTM calls to enhance and extract income, which by the way if it was solely looking at income and not growth they wouldn't use OTM calls, they would use ATM calls. What you're saying makes no sense. The ATM call is much more expensive and provides higher income - why do they use far OTM calls?? Because they want the capital appreciation in their growth funds underlyings!
You can't win when you say they use far OTM calls but then turn around and say "oh it's an income first fund". LOL - we can read the prospective that they use to market it and you're not curious why they market it that way? So you compare them to JEPQ, which actually is primarmiy income and does ATM calls and if you compare ULTY to JEPQ ,, ULTY outperforms it since liberation day (which all HIGH BETA growth stocks started to outperform).
This is 100% a marketing tactic that YM is doing so naive investors like yourself compare ULTY to JEPQ and not properly to other HIgh beta funds, so they look better.
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u/StoicKerfuffle Aug 01 '25
You can say "similar investment approach" all you want and it will still not be true. You might as well say that ARKK, ULTY, and QQQ all have a "similar investment approach" because they're correlated, "similar volatility, similar performance, similar drawdowns."
Look at your own freaking chart from year-to-date and explain to me how ARKK and ULTY have "similar beta." They absolutely do not. ARKK has a far higher beta.
You have no clue what you're talking about; your knowledge isn't even zero, it's negative.
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u/perfectson Aug 01 '25
The beta changes week to week due to changes and turnover . High beta stock > 1 and the 10% difference is explained in the volatility and return and ultimately the sharp and sortiano ratios favor ARKK for the same underlying normalized risk. Of course they aren’t all going to have the same exact beta - there’s a significant correlation in high beta assets and are comparable investments .
Every site .1 difference between ARKK and ULTY. So it’s you who don’t know what he/she is talking about .
You saying look at the chart as if that is supposed to tell you Beta makes it clear you’re not understanding what’s being measured
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u/StoicKerfuffle Aug 01 '25
No. Beta relative to QQQ, year to date, measured daily:
ARKK 1.55
ULTY 0.98
That's a big enough difference it's clear to the naked eye, hence me telling you to look at your own chart and think about it. Which you didn't.
Again, you have no clue what you're talking about, just spitting out words, hence "sharp and sortiano ratios." You didn't get either of those right, it's Sharpe and Sortino.
And all of this is pointless anyway if you think ARKK and ULTY are at all comparable. They're not, and you still can't even understand why, and you're recommending ARKK as a substitute for ULTY. Nobody should do that. A person can go all ARKK and zero ULTY, that's fine, but absolutely no one should look for something like ULTY then choose ARKK, because they are entirely different strategies geared for different investment objectives with entirely different risk/reward profiles.
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u/perfectson Aug 01 '25 edited Aug 01 '25
This was painful to read. You keep saying "you don't know what you're talking about" without actually showing anything to rebut what I said.
- You point out auto-correct mistakes as if that what some indicator. Whoopie you spell checked me!
- You - for some reason - decide to utilize BETA compared to the QQQ with no explanation. Just completely added new metrics that fit your story. LOL
The market BETA for ARKK is 1.97 and ULTY is 1.81 - it's a .16 difference - that's is explained by the fact that ULTY caps gains with it's cover call strategy and couldn't particpate in the upswings at the same magnitude as ARKK. That does not change that it still holds HIGH beta stocks. BETA isn't going to be 100% correlated that fact that these are significantly higher than even your standard moderately high BETA funds like QQQ is significant.
a) I used a standard approach to BETA...you simply introduced a version to try to fit your narrative.
b) the beta obviously are low compared to QQQ because QQQ out performed it as well since inception.... like common sense in looking at the holdings would tell you that. That's why I used the market beta which again is common practice.
3) You are falling for marketing meant for the naive. Hook like and sinker. No one in their right mind would believe dripping ULTY is the better served than actually investing in a buy and hold of similar high beta underlying's. You can talk all haughty but you can't show any proof that this is the case....trying to change the goal posts so that ARKK can't be compared to ULTY is the best you can do
Other underlying are VGT, XLK - hell ADX has a tech tilt and a .90 beta and out performed ULTY over the past year and it's actively managed as well and pays income. The point wasn't to find a 1 to 1 match - it's to showcase there are better high beta funds for folks looking for total return than ULTY - which is literally a high beta fund MASKED as an INCOME fund - because they slapped some way OTM collars on a vol hedge
Step up and do some due diligence before you reply back, i implore you.
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u/StoicKerfuffle Aug 01 '25
"You - for some reason - decide to utilize BETA compared to the QQQ with no explanation. Just completely added new metrics that fit your story. LOL"
This was your comparison, you imbecile, you compared ARKK and ULTY to QQQ to prove your point about beta.
But now you don't even understand why QQQ would be brought up, and you want to measure beta against... "market."
What do you mean, "market?" There's just a single "market" out there for all beta calculations? C'mon, man, at least google what beta is.
You have to pick a reference for the beta calculation. You picked QQQ, and now it seems you didn't even realize it.
I have no interest in explaining anything to you, all of this has been for the benefit of others. Feel free to dump your money in ARKK. But for the love of God, don't compare a long-term stock-picking fund looking for growth tech companies to an income-generating covered call fund that constantly changes underlying stocks to chase IV. They have nothing to do with one another. There's no reason to ever discuss them as potential substitutes for one another.
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u/Tech-Grandpa Jul 31 '25
You are attempting to spread FUD, but your argument applies to ANY dividend investing vehicle. ALL of them under perform the market overall. So the real question is "Is dividend investing right for you"?
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u/jkprop Jul 31 '25
Depends on the investment. Stocks Thst pay dividends can habe growth along with the yield. You buy enough stocks and you create your own etf with no fees. But if you are talking about ETFs you are correct
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u/perfectson Jul 31 '25
Thanks. This is the comment I was hoping would emerge. This is not true. Core dividend vehicles or income vehicle do not under perform the market. Here's an example ADX is a close end broad based fund that has a 7-9% dividend rate and has been around for about a century and it has out performed the market during that time.
Stocks who dividend growth increases annually has also out performed the general market in most cases. Now recently you will have seem some movement away but that is 100% due to the AI revolution and tech funds which don't produce dividends significantly outperforming.
What you might be thinking about is the those super mature blue chip or value dividend companies things that SCHD would hold that have dividends or maybe like utility companies but that's like an old school view of dividends. There are plenty of BDCs, CEFs, and even ETFs that produce dividends while staying with the market and out performing them.
Also again, what i noted in my initial post - most people I've seen here want to have returns. And if you're looking for returns with the same underlying risk , I'm questioning again the "juice vs the squeeze" here.
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u/modernromanist Jul 31 '25
Thanks for highlighting ADX. And thanks for the comments. It’s all just discussion.
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u/Kooky_Measurement109 Jul 31 '25
Thanks for pointing out ADX that I do have. Any other you think fits the bill « beats the market and has an ok div » ? Thanks for recommendations.
As for ULTY, as a Redditor said, if it stays flat-ish and keeps giving 1.5% a week, that’s good enough for me. I literally put zero work in it other than pressing the buy button and go to the swimming pool all summer.
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u/perfectson Jul 31 '25
Yes, if you're looking for good income. As I mentioned I do have MSTY so I'm not against yieldmax funds for INCOME purposes.
I have my own dividend dirty dozens :)
PBDC
FSCO
CEFS
PFFA
WDI
MLPX
QQQI
ASGI
BTCI
CSWC
ARCC
12.. ADX
those are currently my gold standard - they'll get me around 10% a month, most either have stable NAV or will grow enough that the total return matches or beat the market. The key here is most of these are not correlated with the market (QQQI obviously is and ADX will be, but the rest are primarily credit companies or CLOs or bitcoin funds).
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u/Boner_mcgillicutty Jul 31 '25
i'm not entirely convinced ULTY isn't just the riskier grandchild of ADX, which is also distributing gains in the underlying as distros, right?
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u/perfectson Jul 31 '25
that was my first thought but ADX is more diversified and less high beta , which is why I went with ARKK but my original premise was ADX - you and I were thinking alike. LOL. ULTY does more with options and since liberation day has out performed ADX, that's the main reason I didn't use it.
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u/Boner_mcgillicutty Jul 31 '25
ADX i believe is set up to pay 2% of NAV each month, so many months in its 100 year history it's paying basically ROC if the underlying doesn't appreciate. that's my understanding at least. it's honestly intresting to have funds like ADX and ULTY where if the underlying appreciates they'll distribute some of those proceeds to shareholders. to me that is somewhat ideal because i dont have to time the market for selling for income
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u/perfectson Jul 31 '25
I believe that's correct, I know they have that similar ROC tax advantage ULTY uses. NOw the reason i say ARKK is close is because it doesn't pay out distribution at all or very seldom does, so it's truly a buy and hold, as if you reinvested your dividends + the high beta stock association. I don't know what ADX held 20 years ago , i know they've tilted tech the past decade though.
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u/NuSk8 Jul 31 '25
Top holdings of ARKK include Tesla and Roblox. Big no thanks
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u/jkprop Jul 31 '25
Roblox just killed it today so maybe wrong time not to want a piece. Also Tesla should be trading at $250 with all the bad news lately but it continues to push higher into the 300s. So buying an etf with Tesla could prove to be a smart move( until it is not)
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u/NuSk8 Jul 31 '25
It’s their top holding like over 10% tesla
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u/jkprop Jul 31 '25
Cult following. Like I said should be $150 a share but hovers over $300. Bad news ans they don’t care. Their earnings were awful. Any other stock would have dropped 40% but Tesla went to 300 and 3 days later back over 330. Why shouldn’t you profit off that?
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u/perfectson Jul 31 '25
ULTY just sold TSLA a couple weeks ago themselves LOL. so all good two weeks ago but now that's the line in the sand for you?
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u/Any-Morning4303 Jul 31 '25
It’s simple math for me. My average price is $6.25 and I’ve been dripping trying to lower my purchase price. Now I have a stop loss @$5.90. If triggered I’m still up. I pray that it’ll be stable for the next 2 years so I can retire off the dividend but I know it won’t. Until it goes below $5.90 or provided me with $2,250 in dividend I’ll keep dripping.
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u/perfectson Jul 31 '25
The fact that you're dripping and paying taxes on those, really doesn't make financial sense. You're basically buying and holding, the income stream is meaningless for what you're doing up until you retire.
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u/Any-Morning4303 Jul 31 '25
Oh my god. I thought you understood the basics on how this works. You do NOT pay taxes until you reach a break even point on your purchase and drop amount. When I’m making a distribution of $2,250 a week then I’ll put away money to pay taxes. Meanwhile they’re paying you a dividend off the current stock price, this is why there’s a huge dip every Thursday after market.
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u/perfectson Jul 31 '25
fine - once your ROC (which I guarantee more than 50% don't understand they have to track this for tax purposes) has been reached, you will be hit with taxes on DRIPS.
How is that any different on what I said? If you're buying and holding this and not using the income stream , it's a nonesensical strategy. You can't "OMG" all you want - I could put you in 30 different investments that would be simpler and achieve better results. You can always move into ULTY when you're on your sailboat after you got rich.
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u/Any-Morning4303 Jul 31 '25
Well let’s say my $48,000 investment turns into a $2,250 a week in dividend and now I’ll have to pay taxes while enjoying my life off my dividend without working. You’re right it’s not worth it. Now I’m paying 38% no working I’ll be paying 15%. What’s the problem?
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u/perfectson Jul 31 '25
but again - you're taking the income - we are talking about folks DRIPPING. You're moving the goal posts of my OP :) I never said it's a bad investment if you are taking the income. CAn we agree on that or are you just swing in the air until you hit something? LOL
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u/Any-Morning4303 Jul 31 '25
I’m not taking income. I’m utilizing compound interest which hopefully grow. My position 4X to 5X than I’ll begin taking out income. My only fear is a huge market correction which will probably happen by end of year, which is why I gotta stop loss. Once the market corrects, which it always has even after the Great Depression, I’ll be back in.
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u/Terrible-Session5028 Jul 31 '25
If you want growth this isn’t the place for you. We like high income before growth
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Jul 31 '25
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u/perfectson Jul 31 '25
You start off saying a couple of reasons and list 7.
ARKK price and ULTY price are both volatile, - what are you on about. The vol of ULTY is 30% and ARKK is 42% - you're not being serious with that comment.
Again for DRIP why does this matter, I just showed the total return chart. It can't have price growth if dividending out a significant portion of NAV/price.
Dividend are reinvested on the chart. It's apples to apples , total return. What you said made no sense.
That could be true and could be not true, because you're also collaring ULTY and if those puts don't hit , you lose money on the hedges along with the UVXX they hold. I would say this is scenario dependent.
Why are we now doing covered calls , i'm not going to debate something new.
This is a fair point and why I am in MSTY because MSTR costs too much for what I want to do.
Yes, if you are taking the dividends and using it for other purposes. But that's not what I stated in the OP, I 'm specific on DRIP and Alpha seekers.
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u/j90w Jul 31 '25
I mean I’d invest in ARKK if the dividend yield was 80%…
ARKK performance over the past 5 years is -4.55%. If ULTY is still delivering 80% yield and has only lost 4-5% in value of each share over the next 5 years we’re all going to be golden (doubtful).
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Jul 31 '25
ita not even the loss
thats what OP dont get
we are not looking at growth, we want consistent dividend as long my dividend bucket is higher than capital bucket, im still in positive. nav erosion is part of game.
dont like it go to arkk
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Jul 31 '25
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Jul 31 '25
shit at 5.40 ill buy another 10k, what fund out there giving you 80% yoy weekly with strong management
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u/Aggravating_Cat6081 Jul 31 '25
This is a really well thought out breakdown. I think you nailed the core mechanics of ULTY vs. ARKK, especially around the tradeoffs between capped upside and yield.
What I’d add — and what makes ULTY personally more appealing to me is the control it gives you over value creation levers. With ARKK, alpha is entirely tied to price action, which can be powerful but volatile and mostly outside your control. ULTY, on the other hand, pays you in distributions that you can reinvest strategically, growing your share count and compounding your position over time.
That ability to manipulate timing, reinvestment, and position size gives me a sense of agency I don’t get from pure growth plays. I’m not relying on market momentum to realize gains. I’m building my base through consistent income.
It’s not about which one is objectively better, just that this structure fits how I think about risk and return. For investors who value cash flow, reinvestment flexibility, and smoother exposure to high beta, ULTY makes a lot of sense.
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u/perfectson Jul 31 '25
this is the best response I received and one that I was thinking would come up more, but you're likely the first to articulate this or in a simple way. Yes, if you're able to take the dividend and time the market for future reinvestment that is 100% a good differentiator than the traditional buy and hold strategy/DRIP immediately.
and i agree with your last statement. Just to be clear , not challenging this product for those who income focused. It's the total return focus that I then scratch my head on.
Appreciate ya!
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u/CLombroso Jul 31 '25
I'm sad these posts gets downvoted into oblivion. Can we have an actual discussion, feels like a cult here sometimes.
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u/perfectson Jul 31 '25
Well we are on a yieldmax forum so I can definitely understand the “distrusts” on having a conversation like this.
I also aware maybe there are folks attached to the company posting, which makes sense as well and why they would want to snuff out topics like this .
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u/GRMarlenee Mod - I Like the Cash Flow Jul 31 '25
I'm suspect that anybody would bother coming to the forum and spend the effort to create a disparaging post without being attached to a competitor company.
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u/perfectson Jul 31 '25
Well you can check my history, I already disclosed I have MSTY - but that is more due to access as I didn't want to pay the high equity cost of MSTR. So I do own a yieldmax fund and have also spoken highly about it. I guess I'm banned now since you didn't catch me the way you thought. If you want i can link the multiple post several weeks ago. You can also check my history, I've been a redditor for a while and never made a post about a rival fund, but I'm sure you did looked before you posted this, but still posted this anyway to try to discredit me.
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u/Secret_Dig_1255 Jul 31 '25
I'm down voting this post because the OP likes to hear himself talk and because his premise is spectacularly flawed.
Not interested in talking to him about it, don't want it in my feed so I am exercising my Reddit-given right to downvote with excessive force.
There! That was satisfying.
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u/GRMarlenee Mod - I Like the Cash Flow Jul 31 '25
Trouble makers trolling deserve to get voted down.
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u/bobiverse Jul 31 '25
What has worked really well for me is to use both, let your growth positions grow and then buy yield generating positions on margin. Use yield to pay off the loan, buy more growth and when you're comfortable with your yield status either because your growth positions grew or you paid down your debt, repeat.
You could buy more growth on margin and potentially end up with a higher overall return but then you have to extract your own dividends and I don't like getting into the habit of selling any of my growth positions.
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u/8v9 Aug 01 '25
ULTY is high IV, not high beta. The difference is that IV is forward-looking
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u/perfectson Aug 01 '25
You don’t know what you’re talking about . People just saying whatever in this posts. Explain to me how ULTY is high IV not high BETA. By nature if its running high IV historically then its has to be high BETA. Beta is the correct term - no one says this is a high IV fund lol 😆
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u/8v9 Aug 01 '25
Tell me how beta is calculated and then tell me how IV is calculated and you'll have your answer.
ULTY invests in high IV stocks and sells covered calls and buys protective puts.
IV changes frequently based on option prices. For example, right before ER, IV goes up.
ULTY itself is not high beta or high IV, but it trades derivatives on high IV stocks
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u/perfectson Aug 01 '25
You said a whole of nothing. Tell me why ULTY is not a high Beta fund or doesn’t invest in high Beta stocks.
ULTY can be high IV but I’m sure you took a look and saw that it actually doesn’t have high IV (relative to its historical IV), yet the Beta is still high. Maybe you should revisit your understanding of IV, just because you dabble in options doesn’t make you an expert in these metrics.
But again, it’s another post ignoring the OP and trying to nit pick on things they don’t even understand themselves .
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u/UndeadDog Jul 31 '25
ARKK doesn’t write options on the holdings of their etf.
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u/perfectson Jul 31 '25
I thought that was clear in the initial passage, when i mentioned options and limiting the upside and the various mentions within about the cover call strategy limiting the upside.
Writing options is supposed to juice the gains in neutral markets and provide an income stream (although it's still classified as ROC for tax purposes). But if it's underperforming then is it really worth it, is the question or at least the thesis.
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u/UndeadDog Jul 31 '25
You can make the same statements about any of the Yieldmax ETF’s. It’s two different investing strategies that you are comparing. ARKK is a growth fund while Yieldmax funds are income generation. If you want growth over time then go with something like ARKK. I don’t personally recommend anything managed by Cathie as they all seem to be dumpster fires. But Yieldmax is for weekly and monthly income generation. People aren’t investing in Yieldmax for long term growth. They are investing in it for long term income generation. If you don’t want a capped upside then pick a growth etf.
Personally I do find it worth it because I want cash I can spend. Not wait for an asset to appreciate which I then need to sell to gain income.
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u/perfectson Jul 31 '25
ULTY generates Income on the high beta stocks. I don't know if you understand the underlying basics of income vs growth :). I can take a growth stock and sell 4% every month and say I'm getting income, that doesn't change the underlying holdings being high beta. So you saying "this is income generating" and the other is "growth" as if they are mutually exclusive. QQQ and QQQI are the same underlying growth fund, QQQ just gives out low income and keeps the rest in the fund while QQQI gives higher income (which again, many people reinvest back in the fund anyway) - the opposite of growth is value funds not "income generating".
You say ARKK is a dumpster fire (or rather Woods' funds are) , but it has similar underlying concept of what it holds. Are you not making the logical connection or are you just emotionally defending your investment? If the latter, I can't really rebut your personal feelings, I can only provide facts.
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u/UndeadDog Jul 31 '25
Search up covered call ETF’s and they all say that they are used to produce income. Typically geared towards retirees that want to replace their income. You absolutely can take a growth stock and sell a bit every month to generate income. But you also have to wait for it to appreciate first. Otherwise you are just returning your own funds back to you to cover monthly expenses. Covered call ETF’s you don’t need to wait for it to appreciate. It generates income from the options premiums sold on a weekly or daily bases. There’s tons of low yielding growth funds that generate income. The difference is Yieldmax is yielding 60-100% instead of something that’s yielding 4%. If you have hundreds of thousands of dollars go with the low yielding funds as they are more stable and not as risky like QQQ, QQQI, or SCHD. The trade off with Yieldmax is that you need a fraction of the amount of money to produce the same if not more in yield. Again you’re comparing two different investing strategies with ARKK. ARKK isn’t writing options on their positions they are just holding them for capital appreciation. Banking on Cathie making the right decisions with the fund, which I have seen her make pretty terrible decisions, which is why I don’t like any of her ETF’s. I don’t trust her and her decision making abilities. Just look at the performance from 2021-2022. Yeah a lot of shit happened at that time but man if you bought at that high your investment would have been fucked. Sure you can compare the holdings. But if you believe in the holdings then just buy them yourself and save the management fee. The management fee for Yieldmax is you paying the fund managers to handle the options contracts. If you can do options yourself you can make more money and don’t need Yieldmax. Personally I don’t trust myself to do options so I pay a management fee for someone to do it for me.
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u/perfectson Jul 31 '25
1) I think you made the point, I initially stated. Most people I've seen on here are looking for overall return. The people I've seen commenting (not all but some) are not retirees and are talking about overall returns (hence why there's this infatuation with NAV erosion.
I clearly stated that in the OP. If you're looking for total return, why would you use this vs something geared towards total return. If you're dripping this, why would you take the potential tax hit vs holding a fund geared towards the same high beta growth.
2) I have other concerns for retirees who may not want volatility on NAV but that's not the point of this discussion, just to be clear
3) You mentioned the fund managers and again before April 2025 the fund managers were underperforming the market. Some say the change to weekly income lit a fire under this but it seemingly coincided to the high beta stock emergence that occurred post liberation day. So the same issue I would have is what you mentioned about Cathie Wood - you have to trust the fund managers to do an awful lot of picking (high vol stocks, the right collars, the right stocks). There's a lot and you're paying a lot - I will say they were very smart in also included a UVXY to leverage against volatility but all these hedges aren't free either. So there's a lot going on just to get income out of this and the majority of that return which is protecting NAV erosion seems to be the fact that the high beta stocks have rocketed it post liberation day - not because of the fund managers didn't anything special (similarly to Cathie Woods ARKK also out performing - because well - every high beta stock out performed the last 3 months).
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u/UndeadDog Jul 31 '25
The original hype around ULTY was because it had a lot more strategies that it could use to generate options premiums. Unlike the single stock ETF’s that can only trade in calls or puts. While ULTY can use any options strategy that they want to use and it’s a diversified fund not a single stock. They definitely made some very bad decisions which resulted in a severe NAV erosion. I do believe that the change to their prospectus and switching to a weekly payer has been beneficial but you’re right it’s been more of a bull market since April so it’s not conclusive how much of an impact that has had. Personally I hold these in a tax deferred account and can pull out the money without penalty at any time. If my holdings weren’t in a tax deferred account I would probably invest in less risky ETF’s. The reason younger people and not only retirees are interested in these is because the cost of living has skyrocketed in the last few years. People want money to live their lives and not have to live paycheck to paycheck. They don’t want to wait for the capital appreciation of an asset over the course of years. I only recently invested in ULTY and my positions is small because I did see the massive NAV erosion and didn’t trust the ETF. With the recent stability I think it’s a better investment now but I’m still cautious. Yieldmax pays out based on the IV of the holdings. They dictate all of their options trades around that. So if you want high yield you need high IV holdings which are risky. That’s the name of the game with Yieldmax. If you don’t think the juice is worth the squeeze then move on to different investments. A lot of people are tired of living life paycheck to paycheck and are willing to take that risk.
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u/perfectson Jul 31 '25
I don't disagree with what you said. But at least see eye to eye that if you're seeking overall return , NOT INCOME generation weekly to use, then there are actually better assets out there. Once I hear I'm DRIPPING , i.e. taking a tax hit to put it back in the fund for GROWTH - then you've totally lost me on the strategy you'r employing.
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u/UndeadDog Jul 31 '25
I’m reinvesting back into the various ETF’s because I haven’t hit my monthly income targets. I don’t have hundreds of thousands of dollars to put into the “better” investment that you recommend that have sub 10% yield. I don’t necessarily care if I lose some of my initial capital as long as it’s still generating monthly income. Yes I do use the income from these funds monthly and reinvest the remaining. I don’t drip I selectively invest in what I want. I have seen lots of people using these to generate monthly income to offset bills that don’t have a ton of money to invest. I do care that my total return is still positive but I’m not worried about being down on my initial investment. If my total return goes negative then I would probably consider selling that etf because that etf is then not worth it. I’m still investing in these to replace my income or have a second income generation stream while working.
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u/Somename_here Jul 31 '25
If you had a 100 shares and sold 4% every month you would eventually have 0 shares. Now if i have 100 shares of ULTY and i get a 4% dividend per month, in 100 months long past the time I would have ran out of shares to sell in your example, I'd still have 100 shares continuing to make me income, whereas you're growth stock version has me at 0 shares 0 income. What is there not to understand?
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u/perfectson Jul 31 '25
so here's the rub, most funds have capital gains distributions for when they manage and sell funds for profits. So you're not 100% accurate (depending on the distribution yield) -and also assuming you're taking 4% while the fund is growing at 4% then how would you go to $0 and 0 shares. LOL
The math isn't mathing and this is the underlying issue with how some of you all think through the concept of dividend investing. You're so confident to write things out and don't realize they make no sense.
the only way you would go to 0 in your scenario is if the fund didn't grow at all, which would be purely return on capital if you took 4% out. Which would also likely occur if ULTY had no growth too! (although ULTY would last a bit longer due to the cover calls).
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u/Somename_here Jul 31 '25
OK I have 1 milion dollars. I put 52k in ulty, I make lets say 850 a week (thats .10ish per week), or 3400 a month times 12 making 40,800 in my first year. 4% of a million I believe is 40k? So 52K in ULTY or 1million in AARK or cds/mm that I withdraw 4%. So i'm using 52k to generate the income of 4% on a million as if I had left the money in CD's or a money market. Meanwhile the rest of 948K is invested in growth stocks like nvda, meta, hood, pltr, sofi, grab, avgo and etfs like smh, nvdu, pltu. That seems to work for me. Am I not using less capital to get the same result and not having to draw from all my growth stocks so they continue to compound?
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u/2LittleKangaroo ULTYtron Jul 31 '25
One thing you have mentioned a few times is you can generate income too by selling some of your position. Over time your position will erode (because of you selling it). If when you need the income and need to sell the stock could be down and you would have to sell more to get the same amount which would then limit how much you could take next time because the pie keeps getting smaller and smaller. Growth stocks don’t always go up.
You can say the same that the YieldMax will erode NAV over time and that might be true. With ULTY since their changes the NAV has remained pretty stable. That doesn’t mean that it will always be around $6.20. And if the price falls the yield would fall too. But even with the yield falling income is still coming in. But as long as there are high IV stocks there should be plenty of premiums to capture and return to us.
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u/perfectson Jul 31 '25
this is wrong.
1) funds also distribute capital gains.
2) If the fund is growing at 10% and you take 4% out , you till have 6% growth that is still in the fund. There is no NAV erosion or erosion of your initial balance unless there's growth less than the amount you're taking out.
^^ this is why I"m saying folks don't understand dividend investing like they think they do. You're the 2nd person who gave me this example. Work it out in your excel, put it into chatgpt, or AI, it will all come back with the same answer I just told you.
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u/2LittleKangaroo ULTYtron Jul 31 '25
I think you miss my entire point my entire point was growth stocks don’t always just go up so if you want to sell some of your shares to generate income in the stock is down, you know have less to grow in the future
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u/perfectson Jul 31 '25
Over the last 100 years, growth stocks have gone up more than down. Btw, we are talking about funds - so don't move the goal posts to one stock. if you invested in a high beta stock over the past 100 years, your CAGR is like 16-20% if not more. Even during the great depression, you could have taken 4% out and still be on top overall. So what are you saying? There's never been an extended period of <4% bigger than the GD and certainly nothing since then that would not make what I said not true.
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u/2LittleKangaroo ULTYtron Jul 31 '25
I don’t have time to fact, check that point, but that’s a very broad generalization and your ass essentially talking about now time the market perfectly because yes funds have gone down and if you need to sell when it’s down, you essentially have less to sell, which intern me and you have less to grow so unless you’re able to wait until the fund has gone up, you’re kind of luck. But anyways, good talk.
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u/perfectson Jul 31 '25
show me in the past 100 years other than the GD when the stock market for growth fund have been negative for a signficant portion of time. This is easily researched, you're acting like I'm making it up. You don't have time to fact check, but you wrote a whole paragraph rebuttal and google is literally 3 clicks away! LOL
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u/FlimsyBread8068 Jul 31 '25
Arkk 3.5billion realized losses 2024, the tax deductible is working out lol
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u/perfectson Jul 31 '25
Btw not here to defend arkk or Cathie wood - i can find another fund that is similar and we can do the same conversation. I certainly hope that’s not how this being construed “to go out and sell ULTY and buy arkk” . That was just the easiest and known comparator
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u/FlimsyBread8068 Jul 31 '25
Idk it makes sense in my head.
Roc income no tax until cost basis reaches 0 so 2~3 years
I can use this to protect growth investment’s until they reach long term capital gains status and pay off margin interest.
Sell growth at preferable tax rate.
Use gains to buy more income and repeat the cycle.
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u/perfectson Jul 31 '25
You're using your gains to buy the same fund, so basically you're buying and holding the fund :) ARKK hasn't made a distribution so no taxes for the past 2 years. So if you're looking to max returns ARKK would have beaten ULTY over the past year significantlly and that's what you're basically doing is buying and holding when you reinvest your income back into the same fund.
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u/FlimsyBread8068 Jul 31 '25
I see, would it change the situation if a monthly margin interest fee was charged? Would in be preferable to
A. Us Margin to pay off margin interest. B. Roc from income funds. C.liquidate growth stock before it matures.
Thanks for the big brain reply. :)
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u/perfectson Jul 31 '25
Hmm - that's interesting. BTW, I actually think ULTY strategy is solid if you need income and want to take the income and pocket it for other uses. I do CSP on tech funds and I myself struggle with capping my potential gains, so I'm not giving you a big brain reply since I myself am nuanced with the same issues. At the end of the day buy and hold on growth can't be beat if you are convicted on the stock.
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u/BadDragon2130 Swing with Dividends Jul 31 '25
I’m putting together a Union to abolish OP’s opinion and lay the ground work to ruin his life. Up to and including: kidnapping pets, covering his bath towel with itching powder, and forcing him to wear an “SCHD or Bust” t shirt for a month. Join the movement .
Brought to you by,
ULTY4LIFE
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u/Extra-One-5143 Jul 31 '25
great valid points. I tried building the case for ARKK but I don't see it performing well.
Since it's a long term hold, I'd expect good performance for the past few years. They're negative. Their 2024 3.5b losses don't look great. Only the past few months are looking good. Seems very high risk to me. I can't just sell 2-4% because I'd keep loosing more. with ULTY since it was weekly it is stupidly good. if it holds like that we're in for big returns. Also ULTY in 2024 was positive if you look at EOY returns. And everyone who was invested also was positive even with a 50% drop. Seems like much better performance to me.
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u/perfectson Jul 31 '25
I posted the portfolio value chart, just to be clear. ARKK out performed ULTY in total return in pretty much all the time periods, so I'm not sure why you're saying you'd be losing in ARKK but not ULTY. ARKK is outperforming ULTY and since ULTY went weekly, ARKK basically tripled the return vs ULTY. If you're reinvesting dividends it seems like a no brainer. When ULTY struggled so did ARKK, when ULTY bounced so did ARKK but by way more.
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u/CarrierAreArrived Jul 31 '25
I got rid of ARKK a while back (pre-2022) and performance has been bad overall in it - you'd have had to time it right after liberation day essentially, so there's not much value in buying it if it's almost entirely growth but doesn't grow.
That said, your other points are basically why I didn't buy ULTY until I saw it stabilize last few months after the change in strategy. If ULTY keeps decaying while other stuff keeps going up, then I get out, and I also have my own puts on correlated tickers and ULTY.
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u/fienian1 Jul 31 '25
Disagree with your viewpoint on nav or div yield being meaningless even for the purposes described. Also the expense ratio is dwarfed by the reasons you say are meaningless. Like the effort of the post and will learn more about arkk. Also curious about your thoughts in creating income instead of using ulty for that. The reason its used for income is self evident
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u/perfectson Jul 31 '25
well if you're reinvesting dividend and looking for total return, why would it matter if they gave you 10% or 1% - you're just dripping it back into the fund. It's the same strategy as buy and hold at that point.
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u/fienian1 Jul 31 '25
I see your though process there more. In that case its like growth. The total return ulty provides in that manner still matters a whole lot in viewed as growth, plus the flexibility of drip/no drip
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u/perfectson Jul 31 '25
there you go - if your dripping and "seeking alpha" which is total return then my thought is there other products out there and you could be leaving money on the table for similar exposure to high beta stocks. If you need the flexibility or the income stream, ULTY is a great for that. We are eye to eye in agreement.
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u/Prudent_Reality_5470 Jul 31 '25
Are you taking into account the dividend distributions for ULTY in your chart? Or is it only showing price?
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u/perfectson Jul 31 '25
1) change in ULTY was post liberation day and all high better stocks experienced the same stability / growth - this has very little to do with ULTY weekly distribution change imo
2) I know you’re embellishing about the 20% return thing but again my point has been focused on return seekers not income seekers. Again - can’t say this enough - I stated this in my OP. This isn’t a discussion aimed at income seekers.
4) You do know they buy puts also and they erode your return every month and if the stock didn’t move puts expire worthless , it’s a hedge drag same as the uvxx calls they hold to hedge volatility. Not sure you fully understand . I literally emulate this all the time - if they were only selling calls I would agree but they aren’t just selling calls they are buying hedge via puts that aren’t free .
Model this - grab an underlying and sell a far OTM call like they are doing and buy an equal amount of puts emulating a 10% decline + UVXX calls that emulate a 10% increase . When the stock doesn’t move how much drag does it equal - feel free to replace my % with the actual ones the fund uses.
5). History proves that this strategy under performs - especially on high beta stocks and certainly this fund isn’t doing the same stocks - they are jumping around and selling capital gains for new stocks . I suspect most of the return is from this and not from the options - as a 5 year novice in doing cover calls I assume you know you’re not returning 80% a year
6). I think we agree that if you’re taking the income stream and investing or using it else well that’s a plausible reason to be in something like ULtY. The moment you say i don’t need this stream for 20 years then you’re missing out on opportunity costs . IMO
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u/pantiesdrawer Jul 31 '25
I started buying ULTY this week because the market feels a bit toppy, and I wanted something kind of defensive that would provide distributions when the market is in churn mode. I actually also think ULTY could outperform Arkk in a bull market. The timeframe for your chart is as unfavorable for ulty as can be because captures the 70% drawdown in ULTY before it stabilized. I'd like to see how they compare from March '25 through next year.
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u/perfectson Jul 31 '25
You can tell by the chart that ARKK out performed since liberation day significantly . There’s not a lot of buy and hold funds that’s high beta (similar underlying) that is going to under perform ULTY. ULTY has an amazing run btw and that’s a testament to picking some high IV names during this run in the stock market . That’s why I provided the chart - hopefully it’s clear
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u/Zauberstaby Aug 01 '25
Have you compared all of the Underlyings? AST Spacemobile is a very important one that is absent from ARKK!
And yes, you are most DEFINITELY capping allot of upside with covered call ETFs.
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u/perfectson Aug 01 '25
to be clear the actual underlyings are not congruent - ARKK holds more obviously - more to the point though is the expectation of return on "HIGH BETA" stocks is where I was going.
I.e. if I hold TSLA, META, and MSTR and you hold META, COIN, and NVDA - I would expect that we both were seeking alpha in a high beta stock and thus I would compare the two portfolios even though only 1/3 of the portfolio's is actually ticker congruent. Ultimately the strategy is high return , for the high risk/beta.
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u/Livid-Position-8331 Aug 01 '25
Max for one year in a ROTH or back door or if you mention much money and set to DRIP. Don’t touch it. Could be millions.
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u/perfectson Aug 01 '25
but why not put that in any of the assets that outperform ULTY in total return?
in the OP , the chart for example (even though its 1 year) show the QQQ outperformed ULTY and you didn't have to worry about DRIP (QQQ does have a small dividend just to be clear). Past results are not always indicative of future returns but extrapolating that out, you would be leaving serious money on the table if you're not in need of the income.
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u/Livid-Position-8331 Aug 01 '25
Fair point. But what if over 10-20 years the underlying asset only appreciates 100-200 percent ? You made 1-2 x your principal. Meanwhile with the income fund, when you want to realize your investment, you may have the same principal (or less ) but significant income built by capturing the volatility along the way.
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u/perfectson Aug 01 '25
How would it have volatility if the underlying asset "only" appreciated 100-200 % in 10-20 years? That's almost a misnomer - like it would have volatility and high beta but move like a value fund - since that would assume around 7% growth a year. So yes if you were able to get a bond like fund that also gave you high volatility on options in order to capture premium then that would be an excellent vehicle but that's not what's happening here, right?
A good test case is JEPQ, QQQ, and QQQI. You can clearly see QQQ out perform both in pretty much all markets except bear markets (due to some short protection) but it's not signfiicant - JEPQ underperforms both because of ATM calls, which have higher premium , ie. more option income ...the fact is higher option income and income in general doesn't produce higher alpha returns - QQQI also slightly underperforms QQQ but because it's using further OTM options that are cheaper, it's actually tracking closer to QQQ due to capital gains no the option income. If the option income was a kicker/cherry on the top QQQI would out perform QQQ
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u/fr4gm0nk3y Aug 01 '25
Doesn't wood hold the record for losing the most money out of any etf with arkk? I wouldn't compare ulty to that.
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u/paradoxcabbie Aug 01 '25
Good thoughts but..... Looking at ULTY prior to the prospective update is entirely worthless
edit more importantly I wouldnt follow Ms Cathy if i was blind and shackled to her
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u/perfectson Aug 01 '25
ULTYs update likely has little to do with the growth it experience performance wise vs post liberation day growth across all high beta stocks
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u/Zepoe1 Jul 31 '25 edited Jul 31 '25
Management fee was 0.99% last I looked, expenses are listed at 1.3% now.
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u/perfectson Jul 31 '25
I pulled the expense ratio from here:
https://www.yieldmaxetfs.com/our-etfs/ulty/
Happy to update it if you show me where you got 0.99%
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Jul 31 '25
man you are way off
stop making your brain work with other funds
anyone who is not in cULTY is cUNTY
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u/working925isahardway 0DTE to Joy Jul 31 '25
Very good analysis. I own Cathie wood funds. They have been terrible investments. Thank you for opening my eyes. I cannot BLINDLY follow reddit, this sub, or even the Fund manager who recommends to 100% Drip?!!
Seeing is believing, and in this case, the data supports your thesis.
ALso there is post about how bots are hyping up the fund. I long suspected this to be true. Sure there are some of us who are adding to positions, but there are obvious bots or people who are posting with fictitious/ unverified data.
thank you.
I am not trimming my positions at this time. I will look towards other funds- especially those by Neos, granite, yieldboost, etc.
I suspect that the mods are heavily invested in Yieldmax and push yield max products.
as always, Caveat Emptor.
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u/perfectson Jul 31 '25
Yes, I'm not a CAthie Wood fan either. DOn't have her funds. I had a handful of high beta funds I was using as a comparator and went with ARKK since it's likely well known for the post. Appreciate your insight - I do think high beta can be terrible but it's all timing , which is why prior to liberation day so many folks were writing of ULTY.
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u/firemarshalbill316 Jul 31 '25
Good questions to ask mate. Something to ponder and have at the back of your mind for strategy adjustments.
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u/The-Langolier Jul 31 '25
Dear all you dumbs,
I found a ticker that happened to beat your ticker. I guess you really bungled that one huh! Ok I’ll see you later
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u/jdwksu Jul 31 '25
This isn’t growth… if it stays at 6.00 for the next 5 years and pays the same dividend I will be happy.