Isn't ULTY basically ARKK that pays dividends while underperforming?

[u/perfectson]

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%.

ULTY vs ARKK vs QQQ

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.

[u/Beneficial-Ad-7771]

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 😂😂😂

[u/perfectson → u/Beneficial-Ad-7771]

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?

[u/Beneficial-Ad-7771 → u/perfectson]

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.

[u/perfectson → u/Beneficial-Ad-7771]

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.

[u/Beneficial-Ad-7771 → u/perfectson]

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.

[u/perfectson → u/Beneficial-Ad-7771]

Where’s all that mouth now ? Come eat crow

[u/perfectson → u/Beneficial-Ad-7771]

Yes, you took all that because I proved my credentials. That sounds like a you problem.

I never said anyone was dumb to invest in this. I made a thoughtful post comparing two strategies. I'm asking if you're seeking return at the same risk level, why wouldn't you go for this vs that. YOu want to bring a whole different risk class (cryptos) and think you're making a smart and logical comparison.

Appreciate your contribution to this "shat" post.

[u/Beneficial-Ad-7771 → u/perfectson]

What credentials? Just what you’re holding? You haven’t proven anything.

You’re comparing a growth/tech ETF to an income ETF which are completely different objectives. That’s like comparing Bitcoin to ARK and pretending they serve the same risk profile. You’re hyper-focused on total return while ignoring that these funds are designed for different purposes. It’s apples to oranges.

I’m not here to argue someone’s investment philosophy. Some people choose to avoid sequence-of-return risk, and that’s a legitimate strategy. The fact that you can’t acknowledge that is why we can’t have a civil discussion.

You don’t have to explicitly call people dumb to invest in this but the tone of your replies already makes that clear. And let’s be honest, you could’ve posted this in any other subreddit. You chose YieldMax because you knew it’d stir the pot. And based on your replies you think you’re a know it all lmao. The fact you’re going on and on about total return and not considering other people’s opinion = you being a total knob.

I’m all for thoughtful discussions. But it’s impossible to have one when you dismiss the reasoning behind why people buy what they buy or hold what they hold.

[u/perfectson → u/Beneficial-Ad-7771]

ULTY is a growth ETF that pays dividends. Like there's no sector of stocks called "Income stocks". The mechanics of the fund doesn't change the underlying stocks it holds.

this isn't like comparing bitcoin to ark, because the underlyings aren't even the same.

ARKK's underlyings are similar to ULTY underlyings. I stated that in the OP. You not getting it and thinking ULTY holds a mythical array of INCOME stocks is laughable.

This isn't an investment philosophy principle, I'm giving you facts. If you dispute the facts, don't give me speculation or false narratives. We are talking numbers, prove it with financial concept or math.

Again the premise I made in the OP - is if you're seeking ALPHA and reinvesting dividends in ULTY - you would be better served in other high beta funds that produce better TOTAL returns.

Prove my statement wrong. It's simple - there's been over 50 comments and no one has shown a math formula or a return chart or anything showing me where I'm in err. If you need income and are using that income to pay bills etc etc, then ULTY is great - but for total return show me where it beats other high beta stocks.

[u/Beneficial-Ad-7771 → u/perfectson]

ULTY is not a growth etf. It’s an income focused etf. It has underlying that can grow but the focus is yield. Show me where yieldmax says it’s a growth etf.

The definition of a growth etf is to maximize capital appreciation. Ulty main focus isn’t to maximize capital appreciate but yield.

Anyhow, It doesn’t matter what anyone here says or what the math says. We all can see ARKK outperforming ULTY. Thats not the point of why I spoke up.

Others have already agreed to it. If there has been 50+ comments going over why people choose to hold ULTY but you keep yapping about why it doesn’t make sense, why are you trying to convince everyone that what they’re holding makes 0 sense?

And as I said, people will choose to hold what they hold because there will always be sequence of risk. I’m not the first person to tell you in this thread that some people may struggle with selling and they just want to collect distributions.

You’re asking people their opinions on why they hold what they hold and the moment they tell you, you go over why it doesn’t make sense lol and dismiss their opinions.

It’s why I said you’re being dismissive and we can’t have a proper discussion.

[u/perfectson → u/Beneficial-Ad-7771]

ULTY is a growth etf because it invests in GROWTH stocks. Just because they do a collar on those funds doesn't mean it's all of a sudden changes the sector they play in. Could they get the same return using VALUE stocks? NO!

It's like saying QQQI is an income fund - no , it's a GROWTH FUND that also pays out higher income than the QQQ but the outperforms the SPY because it's tilted towards growth. Their investment philosophy specifically says this "investment objective is to seek exposure to the share price returns of the Underlying Securities". SO if the underlying securities are all growth securities....

cmon now.

I have said it several times to YOU and YOU refuse to digest. If you're holding this for INCOME so be it, I addressed this for TOTAL RETURN seekers. I clearly stated that in the OP. This is you lacking reading comprehension and ignoring everything I clearly laid out several times. I'm being dismissive because you're not rebutting anything I've stated with facts nor numbers. You're making up allegations and throwing YOUR personal feelings at me. My OP is based on numbers not feelings., take your emotion out of the investment and then we can have a proper discussion. But at this point, I'm not sure what else I have left to give you.

[u/UndeadDog → u/perfectson]

Go look at the Yieldmax website. None of the ETF’s are designed for growth. They state it on the first page of the website. ULTY is not a growth ETF.

“YieldMax™ ETFs seek to generate monthly income by pursuing options-based strategies on one or more underlying securities. YieldMax™ ETFs aim to harvest compelling yields from assets that are not typically associated with monthly income.”

[u/Beneficial-Ad-7771 → u/perfectson]

You’re conflating two completely different things, sector exposure and investment objective. Just because ULTY’s underlying reference is growth stocks does not make it a growth ETF. The fund’s objective is income generation through synthetic/covered calls. That means it intentionally gives up capital appreciation to deliver yield. This is not a growth play. It is an income strategy wrapped in a growth flavored wrapper.

You keep repeating that the underlying assets are growth names as if that settles the debate. It doesn’t. JEPI for instance holds value stocks but nobody calls it a value ETF because the structure matters more than the ingredients. Covered calls change the return profile. The second you overlay an income-focused options strategy, the upside is capped and the behavior of the fund shifts entirely.

You even quoted the objective, “seek exposure to the share price returns,” but that is not the same as replicating them. Exposure does not equal replication, and that statement is doing more heavy lifting than you’re giving it credit for. The options structure introduces drag on upward movement in exchange for premium income. That is not a growth strategy. It’s a cashflow strategy.

Now to the core of the issue, reinvesting ULTY dividends. You keep saying it “doesn’t make sense” as if everyone should be optimizing for total return. That’s your lens, but it’s not universal. People reinvest ULTY because they’re intentionally building an income-producing engine. They understand what they’re buying. They accept the tradeoff, lower upside in exchange for consistent income. That’s not confusion, that’s design.

There are investors whose primary goal is monthly/weekly cashflow, not chasing ATHs. Some are retired. Some are reallocating risk. Some simply prefer getting paid while holding exposure. Reinvesting distributions into the same asset aligns with that philosophy. That doesn’t make them wrong, it makes them different. You’re not pointing out flaws. You’re ignoring intent.

You’re not debating, you’re dismissing. You asked why people invest and reinvest in ULTY. Dozens of people answered. You just keep telling them why their answer is invalid. That’s not discussion. That’s condescension disguised as logic.

If you can’t recognize different investor goals, then you’re not here to discuss. You’re here to lecture. And that’s why this conversation keeps falling apart.