YieldMax NVDA Option Income Strategy ETF (NYSEARCA:NVDY), YieldMax MSTR Option Income Strategy ETF (NYSEARCA:MSTY), and YieldMax COIN Option Income Strategy ETF (NYSEARCA:CONY) market distribution rates that clear 50% and, in one case, top 188%. Those payouts are real. The question is what the fund gives up to produce them and whether the total return matches the advertised yield. Twelve-month price data for MSTY and CONY suggest it often does not, while NVDY has held together. A diversified peer like the JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) offers a useful comparison of what a covered call structure looks like when the underlying index is spread across multiple tickers rather than concentrated in a single ticker.
How the YieldMax Machine Works
Each fund takes a synthetic long position in its target stock and then sells short-dated call options against that exposure. The premiums collected fund weekly distributions. Portfolios are largely backed by Treasury bills as collateral. CONY reports roughly 92% of its net assets in T-bills, and NVDY holds 20.6% in Treasury securities, alongside its direct 11.5% stake in NVIDIA and a ladder of call options.
Two structural features are worth flagging here. Short calls cap upside when the underlying stock rallies past the strike, so the fund captures only a slice of a big move. When premiums shrink, some distributions are classified as a return of capital, meaning the fund returns shareholders’ principal rather than paying from investment income. MSTY’s July 2026 distribution was disclosed as roughly an 8% return of capital.
NVDY: The One That Held Up
The standout among the three funds has been NVDY. Shares trade near $12, up 15% over the past year and 7% year-to-date on a total-return basis. Recently, the distribution rate has been in the 14.7% range, and the fund has done what the marketing brochure promises: pay income without eroding principal.
A steady uptrend in NVIDIA suits a call-selling program. Premiums stay rich because implied volatility is elevated, but the stock does not gap higher often enough to leave the fund permanently behind its strikes. The 1.09% expense ratio is competitive for an actively managed options ETF, though it remains a meaningful drag against a plain-vanilla index fund.
The tradeoff is opportunity cost. An investor who held NVIDIA shares directly captured a much larger price move; NVDY holders received cash but ceded the tail of the rally.
MSTY: NAV Erosion in Real Time
The cautionary example is MSTY. Shares changed hands near $13 at the most recent close, down from roughly $43 a year earlier. The one-year price return is -70%, and the year-to-date figure is -32%. The distribution rate has been advertised anywhere from 52% to 85% across recent months.
MicroStrategy, now branded Strategy, is a leveraged proxy on Bitcoin. Its share price swings hard in both directions, producing fat option premiums MSTY relies on. It also produces exactly the kind of upside gaps that pin a call-writing fund. When MSTR ripped higher last year, MSTY collected its premium and forfeited the rest. When MSTR fell, the fund took most of the downside without an offsetting cushion.
Even after weekly distributions are added back, the total-return math for a shareholder who bought MSTY twelve months ago is grim. Distributions were paid, principal declined, and a large chunk of what looked like income was a redistribution of capital rather than a return on it.
CONY: The Highest Yield, and the Cost
The loudest headline number belongs to CONY, with a stated distribution rate of 188% paid weekly and roughly $397 million in net assets. Recent payments have ranged from $0.24 to $0.29 per share.
Shares traded near $19 at last close, down 52% over the past year and 22% year to date. Coinbase is a beta-heavy proxy for crypto trading volumes. The same asymmetry that hurt MSTY applies here. The T-bill collateral base of roughly 92% stabilizes cash but does nothing to offset the call-writing dynamic. Distributions are taxed as ordinary income to the extent they are not classified as a return of capital, which changes the after-tax picture in taxable accounts.
The Overlooked Alternative: JEPQ
Rarely appearing next to the YieldMax names is JEPQ, simply because its distribution rate looks modest by comparison. It sells calls on a Nasdaq-100 basket rather than on a single stock, and its distribution rate typically runs in the high single digits. Diversification softens the blow from a single issuer that hollowed out MSTY and CONY, and NAV has been far steadier over multi-year windows.
An investor seeking covered-call income without concentrated exposure to a single volatile underlying will have a different risk profile than JEPQ. The headline is smaller, and the principal experience has tended to be less punishing.
Matching the Fund to the Investor
The three YieldMax funds are not interchangeable. NVDY has behaved like the product its marketing describes because NVIDIA has been a durable underlying. MSTY and CONY have delivered advertised income while their principal compounded downward, the outcome the structure produces when the underlying stock is highly volatile and trending. JEPQ occupies a different lane, trading headline yield for diversification and NAV stability.
A reader focused on cash flow and comfortable with spending distributions that may include a return of capital could find these funds functional. A reader focused on total return has a harder case for MSTY or CONY at current levels, and a straightforward one for either NVDY or a diversified alternative like JEPQ. The yield number on the fact sheet is the beginning of the analysis.
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