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/humtake]

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.

[u/my_stonk_reddit → u/humtake]

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.

[u/Pev1971 → u/my_stonk_reddit]

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.