Luis Alvarez
The Yieldmax MSTR Option Income Strategy ETF (NYSEARCA:MSTY) is one of a handful of ETFS that currently offer circa-100% yields. With typical yields between 1% and 5%, triple-digit distributions will surely turn heads.
But is it MSTY
MSTY: This High-Risk, High-Yield ETF Is All Smoke And Mirrors
Summary
- Yieldmax MSTR Option Income Strategy ETF's headline ~100%+ yield is mostly return of capital, not sustainable income, making the high payout misleading for long-term investors.
- The MSTY fund's synthetic covered call strategy on MicroStrategy Incorporated stock exposes it to significant downside risk, especially given MSTR's Bitcoin-driven volatility.
- While MSTY has outperformed peers in total return since inception, this is unlikely to be repeatable due to NAV erosion and unsustainable distributions.
- I do not recommend MSTY for long-term investors seeking sustainable growth; if you must invest, keep exposure minimal due to high risk.
Rick is a Wall Street Journal best-selling author with over 20 years of experience trading stocks and options. The most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News, cover his work. His passion is business, and he works tirelessly to deliver content in an easy-to-understand manner. In 2018, Rick wrote The Financially Independent Millennial to inspire his readers with his story about becoming financially independent at age 35 despite not learning about money when he was younger. His books are easy to read and often refer to key points that “He would tell his younger self.” When not thinking about business, Rick writes (mainly about cruise ship travel) for his travel blog and is an enthusiast of fast cars, technology, & cooking.
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