DailyBubble presents an insightful look at the recent phenomenon known as “The Magnificent Seven,” a group of stocks within the S&P 500 that have been responsible for generating approximately 20% of the index’s returns. These stocks include Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla.
One common issue for income investors is that these high-performing stocks often have low dividend yields or do not pay dividends at all. To address this concern, DailyBubble introduces the new YieldMax™ Magnificent 7 Fund of Option Income ETFs (NYSEARCA:YMAG). This innovative fund, which began trading on 1/30/24, invests in other YieldMax ETFs focused on each member of the Magnificent Seven, offering attractive yields that can reach up to 100%.
The primary objective of YMAG is to provide current income to investors, with monthly dividend payouts and annual distribution of net realized capital gains. Tidal Investments LLC serves as the investment adviser to the fund, with a focus on managing and administering the fund’s assets effectively.
YMAG is designed to be nearly fully invested in the seven underlying YieldMax™ ETFs, with holdings ranging from 12.45% to 14.93% in each ETF as of 7/11/24. These ETFs utilize options strategies, such as synthetic covered calls and selling put options, to generate returns based on the performance of the underlying securities.
In terms of dividends, YMAG offers varying monthly distributions, with a trailing yield of 32.79% and a theoretical forward yield of 37.5% as of 7/11/24. The fund aims to provide consistent income to investors through its unique investment approach.
While some of the underlying stocks have experienced negative price performance in 2024, the high yields of the YieldMax ETFs have helped offset these declines. NVDY and MSFO have shown impressive total returns so far, outperforming their respective underlying stocks.
Looking ahead, DailyBubble advises caution in light of potential market volatility, which could impact both stock prices and ETF performance. As such, investors may want to monitor the situation closely and consider their risk tolerance before making any investment decisions.
In conclusion, DailyBubble believes that YMAG presents an intriguing opportunity for income investors seeking exposure to the Magnificent Seven stocks. With its focus on generating current income and innovative options strategies, the fund offers a unique way to capitalize on the performance of these high-flying stocks.