Are High-Yield Strategies in YieldMax ETFs Really Worth the Risk?

YieldMax’s extensive suite of exchange traded funds (ETFs) have a large and dedicated following, and there are a number of reasons for this. These funds tend to have unusually high dividend/distribution yields, and some of them pay out their cash distributions every month or even every week.

Perhaps you’re thinking about retiring early and collecting large, frequent payouts with YieldMax ETFs. Be aware, though, that these funds don’t just give you risk-free money. There are potential drawbacks to consider and, at the end of the day, you might think twice about committing your hard-earned capital to these ETFs.

You’ll Pay for Those Big Yields

There’s no way to cover every one of YieldMax’s funds, but we can treat some of the most popular ones as representative examples. For example, YieldMax offers an array of ETFs that use options-trading strategies, including selling covered calls and/or covered call spreads, to generate frequent and sizable cash distributions based on individual stocks.

There’s the YieldMax NVDA Option Income Strategy ETF (NYSEARCA:NVDY), which deploys options-trading strategies to extract extra income from NVIDIA (NASDAQ:NVDA) stock. This ETF advertises a massive 49.71% annual distribution rate and offers to pay cash distributions on a monthly basis.

Here are a few other YieldMax funds that use similar strategies to extract monthly income from individual stocks (or, more precisely, options based on those stocks):

• The YieldMax AAPL Option Income Strategy ETF (NYSEARCA:APLY); based on Apple (NASDAQ:AAPL) stock; advertises a 34.02% annualized distribution rate
• The YieldMax AMZN Option Income Strategy ETF (NYSEARCA:AMZY); based on Amazon (NASDAQ:AMZN) stock; distribution rate of 42.03%
• The YieldMax GOOGL Option Income Strategy ETF (NYSEARCA:GOOY); based on the stock of Google parent company Alphabet (NASDAQ:GOOGL); 63.69% distribution rate

One of the trade-offs is that these funds will automatically deduct annualized operating expenses from the share price. Thus, NVDY deducts 1.27% worth of operating expenses per year, APLY deducts 1.06%, AMZY deducts 1.17%, and GOOY deducts 1.2%.

I encourage you to browse through YieldMax’s other high-paying ETFs, but don’t just look at their featured distribution rates. Also investigate their operating expenses, which pose a minor risk as they’ll reduce the share price and investors’ overall profit-or-loss results.

The Temptations of YieldMax ETFs

Another offering from YieldMax is the YieldMax Universe Fund of Option Income ETFs (NYSEARCA:YMAX), which invests in a range of different YieldMax funds. This ETF carries a 33.28% distribution rate, pays out its distributions every week, and deducts 1.28% worth of operating expenses per year.

Then, there’s the YieldMax Ultra Option Income Strategy ETF (NYSEARCA:ULTY), which leverages the volatility of a wide selection of stocks to create passive income. Like the YMAX ETF, ULTY pays cash distributions on a weekly basis; furthermore, it features a jaw-dropping 87.55% distribution rate but also deducts 1.3% worth of annual operating expenses after a fee waiver.

You can also find YieldMax funds based on Bitcoin (CRYPTO:BTC) as well as gold miners and other assets. It seems like the choices are endless and the advertised yields are much bigger than the operating expenses. So, if the expenses are only a minor risk, why not just back up the truck and load up on these YieldMax funds?

How YieldMax ETFs Can Go Wrong

Here’s how these YieldMax funds can create problems for investors. Even while you’re happily collecting big monthly or even weekly cash payouts, you may have to deal with the share-price under-performance of these ETFs.

We can use the YieldMax NVDA Option Income Strategy ETF as an example. As of October 1, 2025, the share price of the NVDY ETF declined by approximately 30% over the past 12 months.

That share-price performance doesn’t include the monthly cash distributions, but it’s still a serious concern. Meanwhile, during that same time period, the share price of NVDA stock increased by around 53%.

Granted, NVDA stock pays a tiny dividend while NVDY offers large cash payouts. Still, there’s an ongoing tug-of-war between the tempting distributions and the potential share-price drawdowns. Hence, prospective investors should weigh the risks of these YieldMax funds.

We can perform a similar analysis with the YieldMax Ultra Option Income Strategy ETF. As you’ll recall, this fund features an 87.55% distribution rate.

However, partially due to the limitations of the fund’s options-trading strategies, the ULTY ETF’s share price fell nearly 47% over the past year. To a certain extent, this would have offset any gains from the weekly cash distributions of the YieldMax Ultra Option Income Strategy ETF.

Worth the Risk if You De-Risk

Are YieldMax’s mega-yield funds worth the risks posed by their operating expenses and potential share-price drawdowns? The same options-trading strategies that generate substantial income can also weigh on the share prices of these ETFs, so investors need to be careful.

Sure, these YieldMax funds can be worth the risk, but you’ll definitely want to mitigate your exposure to these volatile ETFs. If you choose to participate, it’s wise to only hold a few shares of ETFs like NVDY, ULTY, and so on.

Additionally, you can de-risk your investments by continually monitoring your YieldMax ETF positions. Are the share-price drawdowns too much for you to tolerate? If so, then you may choose to sell your share positions, cut your losses, and move on to more risk-reduced assets.