On Tuesday, YieldMax debuted the YieldMax Magnificent 7 Fund of Option Income ETFs, a fund that invests in seven other YieldMax ETFs, each of which provides options-based exposure to one of the Magnificent Seven stocks.
An actively managed fund, YMAG equally weights its component ETFs, rebalancing them monthly. Those holdings include the following:
Each of these component ETFs implements a synthetic covered call strategy, which allows the funds to provide investors with monthly income distributions while also providing indirect exposure to the underlying stocks’ performance. The investor gives up some of the stocks’ upside performance in return for lower volatility overall.
That’s likely to appeal to investors who want exposure to the upside of the widely traded stocks included in the Magnificent Seven but are concerned by the occasionally steep swings in their performance.
YMAG has an expense ratio of 1.28%.
The Magnificent Seven stocks are a group of mega-cap companies, most with more than $1 trillion in market capitalization, that either fall within the technology sector or could be consider “tech adjacent” in nature. The companies have been key drivers of the current bull market.
According to ETFDB.com YieldMax currently has 19 U.S.-listed ETFs with more than $1.6 billion in total assets.
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