YieldMax® Big Tech Option Income UCITS ETF (YMAG)

• An actively managed ETF domiciled in Ireland, compliant with UCITS standards.
• Launched on March 25, 2025.
• Strategy: invests in technology and related stocks, combining direct equity exposure with a covered call strategy (selling call options on some of the stocks held) to generate additional income.
• Distributions: monthly. The goal is to provide a steady monthly cash flow.
• Total Expense Ratio (TER): 0.99% per year.

The “big monthly dividends” — how much does it really pay?

• Current distribution rate: around 23–24% annually, assuming recent monthly payouts remain consistent.
• Recent distributions (per share) are about ~1.05–1.08 USD per month. Examples:
  • May: $1.056
  • June: $1.0533
  • July: $1.0867
  • August: $1.0741
  • September: $1.0768

Why the yield is so high

1. Covered calls: Selling call options on owned stocks generates premiums, which are redistributed as income. This can produce “extra yield” compared to just dividends or capital appreciation.
2. Exposure to big tech: The fund holds companies with strong growth potential. Covered calls help monetize volatility and potential upside in exchange for limiting gains above the option strike price.

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The main risks and caveats

1. NAV erosion
   Each distribution reduces the Net Asset Value (NAV) proportionally. Over time, these reductions can weigh heavily on total returns.
2. Return of capital risk
   Some distributions may come not from actual income but from capital returned to investors. This effectively reduces the principal invested.
3. Capped upside
   In strong bull markets, gains are limited because the ETF gives up part of the upside through sold calls.
4. Market volatility
   Tech stocks are volatile and sensitive to interest rates, regulation, and global risks. YMAG is highly concentrated in U.S. tech.
5. High fees
   The nearly 1% TER is significant. If option premiums decline, fees eat more into net returns.
6. Short track record
   Launched in 2025, the ETF lacks historical data through full market cycles, making long-term performance harder to predict.
7. Currency risk
   For European investors, USD fluctuations against EUR can significantly affect net returns.

Who it may suit

YMAG may appeal to:

• Investors seeking high monthly income and willing to accept capital erosion risks.
• Those comfortable with capped equity upside in exchange for steady cash flows.
• Portfolios that use it as an “opportunistic income” component, not as a core growth holding.

The YMAG ETF offers very high monthly income, currently translating into about 23-24% annualized yield, which is rare for a UCITS ETF.

However, the trade-offs are significant: potential NAV erosion, risk that distributions may include return of capital, capped upside from covered calls, sector concentration in volatile tech names, currency exposure, and a relatively high fee structure.

YMAG is best seen as a high-income, high-risk satellite holding rather than a safe, core investment. For the right type of investor, it can provide strong monthly cash flows — but it requires careful monitoring and portfolio balance.