ULTY: The Gambler's Income ETF

Summary

• ULTY offers extremely high yield via aggressive, actively managed covered call strategies, but carries significant risk and volatility due to its focus on high-beta stocks.
• While recent total returns have outpaced the S&P 500, this performance is highly dependent on management skill and is not consistently reliable. Its lifetime performance is still fairly poor.
• Most distributions are classified as return-of-capital, providing tax deferral benefits. However, this has become a norm and is no longer enough to stand out.
• ULTY is best suited as a speculative, small 'lottery ticket' position for risk-tolerant investors; index-based income ETFs offer better risk-adjusted returns.

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Introduction

Regular readers of mine will know that I have a tense, one-sided relationship with YieldMax ETFs, the progenitor of some of the highest yield ETFs on the market (true to their name), where I give sell ratings to their funds, and they have no

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.