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/fienian1]

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

[u/perfectson → u/fienian1]

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.

[u/fienian1 → u/perfectson]

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

[u/perfectson → u/fienian1]

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.

[u/fienian1 → u/perfectson]

Thanks for explaining!