YieldMax's High-Dividend ETFs Face Criticism for Underperformance
YieldMax, an American asset management company's high-dividend covered call ETFs, have been criticized for failing to enhance returns and protect against declining markets. The 'YieldMax Tesla Option Income Strategy (TSLY)' and 'YieldMax Palantir Option Income Strategy (PLTY)' did not adequately respond to Tesla and Palantir's stock price movements, respectively, leading to investor discontent. Notably, TSLY has fallen by 38% year-to-date, highlighting its shortcomings in downside protection, while PLTY missed out on anticipated stock price gains.
Other ETFs provided by YieldMax also exhibit similar features by offering high dividends, yet fall short of effectively mitigating market downturns. The lackluster performance underscores a fundamental issue: emphasizing high dividends without sufficient capability to protect against stock declines during market volatility. Consequently, investors find themselves disappointed, and this sentiment could significantly influence their future investment decisions.
Related News
Thought it was profitable… Lost principal with high-dividend ETF - Maeil Business NewspaperTo pay dividends of the US YIELDMAX Covered Call ETF, principal was deducted, missed half of Palantir's gains, and only mitigated Tesla's drop by 3 percentage points
Why is the Yield of Tesla and Palantir High Dividend Covered Call ETFs Like This? - Maeil Business Newspaper'Ultra-High Dividend Covered Call' by U.S. YieldMax: Tesla defends by 3 percentage points, Palantir loses 24 percentage points. CONY and NVDY perform poorly even in a falling market. 'Lack of defensive capacity, high dividends are a trap.'