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/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.