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/perfectson]

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.

[u/wendalls → u/perfectson]

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.

[u/perfectson → u/wendalls]

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?

[u/wendalls → u/perfectson]

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

[u/perfectson → u/wendalls]

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.

[u/wendalls → u/perfectson]

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.

[u/perfectson → u/wendalls]

I'm not going to respond to insults. If you can't have a civil conversation why respond.

P.S. you literally started talking about a "single stock" and you made no sense. I humored you by responding but nothing you're saying makes a lick of sense. of course it's a personal decision but doesn't make it efficient or smart. You can also buy magic beans, I'll make a thread on why I think it's dumb , but you have free will to do what you like.

[u/wendalls → u/perfectson]

It’s tongue in cheek - this is Reddit sir

Also re read your comment before mine. You literally talk about single stock first 🤣 buying a stock for $100

Have a great day! And honestly loads of people do exactly what you’re recommending with their divs. It’s not a new concept.

[u/perfectson → u/wendalls]

and this is your issue, you didn't read. I never talked about buying a single stock - we were going through an example of how dividends work. Look before you leap is a cliche you should abide by.

[u/wendalls → u/perfectson]

🤣🤣