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👉 YieldMax MSTY: High-Yield Income Opportunity 💵
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YieldMax MSTY: High-Yield Income Opportunity
In today’s newsletter, we’re going to be doing a deep dive on a standout offering from YieldMax ETFs:
YieldMax MSTR Option Income Strategy ETF $MSTY ( ▲ 0.23% )
This fund has attracted significant attention for its yielding potential and innovative income-generating strategy.
We’ll be covering its performance, objective, expense ratio and how it’s able to deliver monthly income for its shareholders.
YieldMax MSTR Option Income Strategy ETF (MSTY)
Fund Objectives
MSTY is an actively managed ETF with the goal of generating monthly income while maintaining capped exposure to the share price of MicroStrategy Inc. $MSTR ( ▲ 0.03% ).
The fund does not invest directly in MSTR but rather uses options to achieve its objectives.
It’s secondary focus is to provide capped participation in the gains of MSTR. The reason it’s “capped” is due to the options strategy of the fund, which limits the participation in the upside potential of the stock.
Combining income with growth, this makes MSTY an attractive option for investors who are seeking income without the volatility of directly owning MSTR stock.
Income Generation Strategy
MSTY generates income by selling covered call options on MSTR stock. This strategy produces high yields for investors by harvesting these premiums and distributing them back to shareholders.
In a nutshell, MSTY sells the right for someone else to buy MSTR stock at a specific price (the strike price) in the future. Something to be aware of is that the funds distributions include return of capital, which can erode the net asset value (NAV) over time if MSTR underperforms.
Expense Ratio
MSTY has a gross expense ratio of 0.99%, which is considered competitive for an ETF with such an innovative strategy. Though higher than passive ETFs, the distributions of the fund can outweigh the cost.
This fee covers the costs of managing the options portfolio. Like any actively managed fund, the expense ratio will be higher. It’s important to note that while the expense ratio is modest, it can impact your returns over a long period of time.
Since inception, the total return of MSTY is 336.59% (196.46% annualized) including all dividends paid.
Monthly Distributions Dating Back to January 17th, 2025
The Current Distribution Rate
The distribution rate is the annual rate that an investor receives using the most recently declared distribution from the ETF, including option income. It is calculated by multiplying the ETFs Distribution per share by 12 and dividing that amount by the ETFs most recent net asset value.
Risks and Considerations
MSTY poses risks due to its single-issuer focus and option based strategy. The fund is not diversified and therefore its performance is heavily ted to MSTR, which can lead to higher volatility than your traditional ETF.
Your upside potential is capped due to the covered call strategy and you’re exposed to downside risk should the underlying stock decline.
Additionally, distributions are not guaranteed, and the inclusion of return of capital can erode NAV over time.
How I’m Currently Using MSTY
MSTY has become a cash flow position for me, to use in other high upside stocks. Yes, the net asset value erosion plays a large part in this position, however the distributions received outpaces the erosion of the share price to date, and therefore I’ve experienced a positive return.
That isn’t to say that this will continue nor am I making a prediction that it will. However the underlying stock MSTR is tied to the price action of Bitcoin, an asset I’m extremely bullish on long term.
My Strategy with MSTY:
I currently own 406 shares at an average price of $23.68.
Every month, I get paid between $400-$600, depending on the price action of MSTR.
That money gets directly deposited into my cash position (in USD) and I then turn around and do 1 of 3 things:
Reinvest the money back into MSTY to then generate more dividend income the following month
Reinvest the money into other higher growth stocks. You’ll get access to the full list of stocks I’m currently buying when you upgrade to premium here.
Take the money out and use it towards living expenses. I’ve only done this one time and it was because I was in a pinch. But I HIGHLY recommend reinvesting the dividend back into the market.
These types of funds are great tools if you already have a solid base of assets that you want to build.
For reference, and based on the last MSTY distribution, if you had $250,000 invested in MSTY, you would have received a juicy $14,000 pay day in July.
Of course this amount will vary month to month, but you can see how this could be powerful for income investors.
See you in the next one!
Get to a point where your dividend income can cover 100% of your living expenses and you'll never have to work another day in your life.
— #THE DIVIDEND DOMINATOR (#@TheAlphaThought)
11:55 AM • Jul 19, 2025
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