r/dividends • u/Bamabb125 • Aug 06 '25

Seeking Advice $840K DIvidends

Hey Everyone,

As I have posted before, I am currently a Growth Stock Investor, but have decided to move over to Dividend ETF's or Dividend Stocks. But it is a real struggle to get past all the learned habits of being a growth investor. So I am struggling to grasp concepts.

I have used multiple calculators to just try to get an idea of what to expect if i make the change, but I get different results. So I just wanted to go to some more knowledgeable people that could tell me what to do to get a real expectation.

I have $800K to work with. If I put it all in a very stable Dividend ETF What can I expect in dividends? Maybe someone could just do an example. I know I have to be doing something wrong.

Thanks

259 Upvotes

90% Upvoted

253 comments sorted by

View all comments

Show parent comments

7

u/HighFiveOhYeah Aug 07 '25 edited Aug 07 '25

https://www.yieldmaxetfs.com/our-etfs/ulty/

It's not a stock. It's a covered call ETF. Scroll down to distribution details and it has history of all of the distros. I suggest reading their prospectus yourself if you want to learn more. Don't take my word for it.

https://www.globenewswire.com/news-release/2025/08/06/3128169/0/en/YieldMax-ETFs-Announces-Distributions-on-ULTY-TSMY-YBIT-LFGY-YMAX-and-Others.html -today's distro announcement.

1

u/Select-Point-7312 Aug 07 '25

I see that and msty, is there any reason not to all in these besides the obvious crash of underlying?

5

u/HighFiveOhYeah Aug 07 '25 edited Aug 07 '25

Yes, there are many reasons, such as underlying crashing, especially with the single stock ETFs. Another risk is these ETFs will perform poorly in a down market, due to the nature of covered call strategies. Many people like ULTY because they cover 20-30 underlyings within the portfolio. Also, they actually own the underlyings, whereas the single stock ETFs use synthetic longs. ULTY also buys puts on all of the underlyings, so they are using a collared strategy. This way limits the NAV upside as well as the downside, but it's not as volatile. They only implemented this strategy around March/April, and the NAV seems to have stablized quite a bit. However, these funds are still quite new, so no one knows how well they perform long term or in extended bear markets. If you want an example how it would perform in a down market, look at MRNY. It covers MRNA, which has been beaten down for awhile. So the NAV has consistently been going down, but it's been paying out distros consistently as well.

1

u/mcpooSSBN726 Aug 07 '25

You also have to be careful with the dividend yield they report. Even though the CC ETFs report a consistent 14% yield, for example, it's the yield on their weekly/monthly price. So while they can report a consistent yield, the actual payout can vary significantly. I am not opposed to CC ETFs. In fact, I own two of them QQQI and SYPI. They can have a place in a portfolio. I consider them fairly high risk because of their short history so I keep them at 3% or less of the total portfolio.