Many high-yield funds, for example, distribute a large portion of their income, but if they’re not reinvesting enough in the underlying assets, the value of the fund can erode.
Over time, you could be left with less principal than you started with, even though you’re receiving regular income. This can be a problem, especially for people looking for long-term growth or those who plan to rely on these investments in retirement.
That’s where an advisor can be really helpful. Managing a portfolio to balance both "explosive income" and protecting your NAV from erosion is tough. It’s easy to get caught up in chasing high yields, but a financial advisor can help you take a more holistic view. They can assess whether the income you're generating is sustainable or if it’s coming at the cost of long-term growth
Totally. But let’s dig deeper into this. Say I’m getting these high dividends or yield from something like REITs or energy stocks. What exactly is causing NAV erosion in those cases?
Do another one of these when there's more data on XDTE, QDTE, SPYT, QQQT, SPYI, QQQI, ISPY, IQQQ, YMAG, and YMAX. I would like to see the levels of nav erosion for all these funds and i think others would too
Exactly. All of those actually own the underlyings and sell spreads for income. SPYT and QQQT hold 95+ % of their value in actually owning the ETF's. so they are only using less than 10% of the fund to generate income. FEPI owns individual stocks and writes a lot of old school Covered Calls.
Yup, these are for retired folks like me. Like lets take TSLY i am down 65,188 but i have collected 90,100 in divs. Technically i am ahead 24,912 and most of that went back to other funds or steady eddies like PDI, JEPQ, AIPI and FEPI. NAV erosion doesnt bother me much, but what your missing is these funds are based on the underlying. Tesla has had a tough couple of years, so yes it will have larger NAV erosion. As Tesla recovers the NAV erosion may actually go away and i will have my original capitol investment and all those divs for that time. Some of these i own like MSTY and NVDY have capitol appreciation too. Your right, for someone not retired you should be focusing more on growth like SCHD and VYM! Thanks for the video!
Hey Joe, could please do a video on those weekly distribution ETFs like QDTE, XDTE & RDTE to show how many percent of the distributions need to be reinvested to return to a value of $100,000? Thanks!
Could you do a side by side with XDTE, SVOL, GPIX, and GPIQ on this? I’d be interested in the results of that. Well done on this video, very informative:)
You pump already taxed money in the front end and get your own money back at the rear end only now it is taxable. I was very attracted to these funds due to the income but watching the NAV erode away the capital turns my stomach.
I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement, I'm 55.
Those sound like great picks! consider financial advisory so you don’t keep switching it up, top 3 payers for the month were $OHI, $KMI, and $EDP... not bad for 350k
You have a very valid point, I started investing on my own and for a long time, the market was really ripping me off. I decided to hire a CFA, even though I was skeptical at first, and I beat the market by more than 14.3%. I thought it was a fluke until it happened two years in a row, and so I’ve been sticking to investing via an advisor.
I'm intrigued by this. I've searched for financial advisers online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
I've experimented with a few over the past years, but I've stuck with ‘’Aileen Gertrude Tippy” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
SVOL was the only ETF I own that was up today (20-SEP-2024). But I still have more invested in SCHW and JEPQ. I just put about $1,300.00 (33 shares) in QDTE 3 weeks ago to see how it would do. Right now I'm up 1.82% ($25.13 Total gain) - reinvesting all my distribution.
I put my money in short term I wanted to leave nyc but keep my money (cause I would have spent every penny if I used it) used the dividends to pay bills while I started a new job and get established reinvested half maintained my principal (aka) life savings. Then sold and bought what I consider stable ETFs. These high yield funds gave me the confidence, time and income to move while preserving most of my money. :) I will always be thankful that these hit the market :) 🎉
The problem with these high dividend funds is that you are taxed on the dividend, regardless of re-investment or not. Add taxes to your spreadsheet...assuming someone is using this for income...and these all of a sudden turn quite ugly.
One thing to be mindful of is the fund's inception days and the not-so ideal market environment they could have been released in. For example, SVOL has shown erosion for those that got in during inopportune times, though I bought it August 5th, therfore my returns are ideal. Every fund may not be plagued with erosion. It could just be the market environment could have been less than ideal.
What’s your thoughts on high yielding CEF’s? My SVOL strategy is to buy when there’s extreme fear in the market. August 5th was the golden opportunity for SVOL and might not come again for a while.
I think the most important thing is that the "absolute" distributions don't just go down over time (not yield). If the sequence of distributions is like 1.00, 0.89, 0.79, 1.01,.... It just mean it's not a straight line to zero, it fluctuates. I like doing a bell curve distribution graph with +/- 1 std deviation to evaluate those.
Can you do another video like this but with NVDY, FEPI, QDTE and XDTE? I appreciate the time and effort you put into this and have to say the presentation was amazing! Thank you.
Just discovered your channel and as a result these 'high yield' ETFs. To truly evaluate the risk vs reward of this investment strategy you need to calculate the net annualized return by year since inception as well as the IRR for various hold periods. For example, what's the net annualized return on SVOL if I reinvest at the net zero capital loss percentage of 27%? What's the IRR for a 1, 2, or 3 year hold period?
A follow up...I calculated the Inception to Date (ITD) annualized return and IRR for SVOL. The ITD Annualized Return is 10.05% and the IRR is 10.92%. In my opinion, that's OK but not great relative to the amount of risk being taken with this kind of investment strategy. What happens if we have a significant bear market? Since the inception of this ETF the SP500 is up 35.64%.
And this is during a very bullish market, all indices going up over 12% for the year. I suspect a lot of these high yield ETFs will never comeback to original NAV value, even with 100% reinvested, after any major stock market drop. Because after the drop the distribution will also be cut. Imagine if the market wasn't bullish, this would be much worse.
Just look at all the CC ETF’s NAV during 2022, absolute slaughter. These CC ETF’s are very dangerous but there’s more and more people investing in them. The only ETF’s that are worth it are DIVO and JEPI or JEPQ. Stay away from ITM CC ETF’s like QYLD, RYLD, etc. Those are complete garbage.
So while it lost some from inception SVOL has the last 2 yrs lived basically between 21.00 and 23.00, I buy it when it dips below 22.00 and have sold at a profit when it goes back above. The last 18 mon I haven't seen anything I would call NAV erosion.
we need one more column for each situation/scenario: current total (NAV + distributions) vs the initial 100K. Can we assume here that distributions are not taxed (sometimes 30% on dividends)?
great video, however before this new high yield etf came about, the golden rule with other funds was that you only withdraw 4% and reinvest the rest, so yes you have to reinvest in any fund you have or you will have nav erosion, this new etf has now increase the money you can possibly withdraw
I hope you answer the methodological questions that are in the comments such as the price fluctuations in reinvesting dividends in shares …. What about if you reinvest 100% of the until you have received 100% of your original funds back-? Biggest question with these funds is will the volatility remain over long stretches & how to deal with that instability in yields You receive in dividends
Sad reality for these, although SVOL still doesn't look that bad. I came up with the same math, then subracted the erosion, or the reinvestment needed. It looks like the true yield for that one may still be around 11.5% which isn't exactly terrible for someone who wants passive income.
You seem to have an error in your spreadsheet. Your svol calculation for 50% reinvested is showing the exact same as 35%. I believe your reference cells need to be updated for 50%. Either way good content. 👍
? You ll get assigned then. I sell puts on stocked I'm bullish on so I can collect the premium income without get forced to buy the shares (ie income play)
What about taxes? Unfortunately, I have to invest in Uncle Sam as well. Is there a website which calculates total return taking your individual tax rate into consideration?
9/21/24 Thank you for doing the math on these - am 78 with no retirement - am NOT "poor" but with the economic strategies of our government - I want to better my situation. So, I bought 10 shares of ULTY on 9/16 and was paid $9.83 for my efforts on 9/20 - Because I have not done well in picking stocks - am currently wanting to see IF this strategy is viable for me. YES I will buy 11 more ULTY before 10/16 - am now going to buy SVOL -- BTW -- what you are sharing is NOT advice -- this is only for entertainment and mental stimulation - Bendiciones - y buena salud -- Will start going through your postings to see IF I am able to glean additional ways to earn income. Thank you -
General thoughts: Assumption - I want as much income as possible from the ETF in 5 years, (Reinvest 100% for 5 years). During this time the NAV most likely will fall and inverse split. But each time I reinvest, It's likely the NAV will be lower..This means greater share accumulation. If any ETF has say a $0.50 Dividend and I have collected a ton of shares, because of lower share. Why would you care about capital gain?
I held JEPY for a little while. It was just a small position but I still got out after a few months. I got a 7% return overall. I think if there is a recession and the market tanks these get hit real hard.
Random unrelated to the Rtf’s…I been debating on hard on slowly buying into MPW and then running OTM covered calls as it (hopefully starts to recover) though I was still waiting to see some improvement to get a crazy low sub 3 average…unless it comes down again of course 😅
this is crucial (perhaps life changing). i am buying more svol and try to live off of svol distribution. one point on tsly( btw, i am tsla bull): this really depends on when you initiated the coverage of tsly imo. i think if you start to cover tsly now, things will look more optimistic going forward. thanks.
One trick is to buy the ETFs on Margin and have the huge Dividends pay it off. As for whether it's worth it, the decay for the last year with QQQY is 45%. If the Yield is 90%, then QQQY would have a 45% profit, no? Plus soon Defiance is paying Weekly instead of Monthly.
Better to just buy the underlying and if you have enough when you retire, just borrow against it, then leave what's left when you die. Or just sell what you need for the year.
Good video, but it's a little apples to oranges. SVOL has been out a whole 2 years ahead of the other funds, so of course comparing it since origination, it will look much better than the other two. In fact, in terms of total returns, SVOL has done the worse out of JEPY, QQQY, and IWMY. I think if your data started by comparing the same dates for each fund (IE, either starting in September when comparing QQQY/JEPY and SVOL, or November for IWMY), then you'll have much different results.
All of this research is very good and practical, but the majority of it has been through a bull market. If these funds had been around in 2008, my gut tells me they really would get whallopped. Except for SVOL. I have a lot of faith in short vol as a strategy.
As an lnvesting enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?.
People dismiss the importance of advisors until they are burned by their own emotions. I remember a couple of summers ago, following my lengthy divorce, I needed a good boost to assist my business stay alive, so I looked for qualified consultants and came across someone with the highest qualifications. She has helped me raise my reserve from $275k to $850k, despite inflation.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
Stacy Lynn Staples is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
How can we call a fund "high yeild" of the NAV is going seriously down? Net is net, so to speak. High distributions that deplete the "principle" if you will, isn't high yield unless the total net return actually is high. Sounds like they are playing word games? At the end of the day it's net that matters. Ideally with stable or increasing NAV. I go a step further and say you don't have your first dollar of spendable proit until you have twice your maximum drawdown... plus $1... That is to say... you drawdowns never go below your starting bankroll ever again. (Starting bankroll being equal to max. draw down.)
Then they fail to become “income”. However, it would add to the investing amount over time. They’ll only shine once the dividends are kept instead of reinvested.
Why cherry pick why not do nvdy, msty, amzy, fby , fepi or spyt dont fit the narrative??? They all crush SVOL and are very stable nav or have gained in nav
Didn’t necessarily cherry pick but gets overwhelming if you do too many. Maybe in the future. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
I appreciate all the hard work you put into this presentation, but couldn’t help myself to comment. I think the entire video was heavily flawed and skewed to prove a point with NAV erosion. With the exception of SVOL you picked 4 of the worst charts you could find. I think most that have really done due diligence on these funds realize there is no way you aren’t going to reinvest a huge portion of the dividend distributions in order to take advantage of the compounding effect over time. You also included TSLY, which isn’t indexed and when there is a decrease in the underlying (ie a sell off) of course the fund is going to decrease-but you never acknowledged the fact when Tesla has a breakout TSLY is going to increase significantly. Investors who are buying in right now are going to have a vastly different cost basis. In summary, I don’t think the presentation achieved the fair and balanced data you are looking for. I would try again in one year but next time pick different high yield funds.
The problem is your methodology. You did these all from inception. Some of these, if you went from Jan1st 2024 to now. You would have experienced zero NAV erosion. You would have actually seen NAV appreciation. I personally wouldn't be the first to buy a new fund.
That's really not an issue. Granted when you bough4 matters as it always dose. However they are sinking ships in yeildmax. All the best funds are declining in time.
Picking TSLY is disingenuous and misleading. Tesla has been in a huge bear market. If you owned the stock you’ll be in the red. How about being honest and doing a review of NVDY and show the results. At the end of the day these are risky investments. If the underlying stock is performing well the covered called ETF providing income will hold its own.
Nice work, Average Joe, but you're way too smart for the people in your comment section. You can lead a horse to water...Defiance and Yieldmax intentionally target the ignorant for management fees. People who waste their money on these 2 companies' funds do so on emotion. They could care less about reality and actual data like what you done. If they did remotely understand, they would have done this analysis like you already.
TSLY will do well if Tesla does well. Tesla has had a rather poor year. So don't expect TSLY to blow it out of the water. Never forget the underlying's performance needs to be taken into account.
Seems your biased against yieldmax as you easily could have included one of their funds that was based on an underlying that didn't absolutely tank to half value. Say NVDY. If you took that 100k at inception picked up 5k shares since it launched at $20 a share. It would have paid you out $21 roughly back in September and the nav is currently sitting at $23 a share. That means you would have been paid $105k in dividends plus your shares would have appreciated to $115k in value. Making overall your 100k investment worth $220k. TSLY was bad timing since the underlying absolutely tanked and was forced to do a reverse split. Plenty of their other funds are on track to same as NVDY as well.
People forget these ETFs aren't much different than investing in their respective underlyings. It's not advisable to invest in TSLY if you're not bullish on Tesla. There's no free lunch. You gotta do your DD on the underlyings. Otherwise you will despair and sell at the worst time.
I can appreciate that perspective. Not biased against YieldMax but I do think the value they bring is very limited. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
![YoungBoy Never Broke Again - Missing Everything [Official Video]](http://i.ytimg.com/vi/dTYeMZGzOzw/mqdefault.jpg)
Many high-yield funds, for example, distribute a large portion of their income, but if they’re not reinvesting enough in the underlying assets, the value of the fund can erode.
Over time, you could be left with less principal than you started with, even though you’re receiving regular income. This can be a problem, especially for people looking for long-term growth or those who plan to rely on these investments in retirement.
A lot of people focus on getting high yields, but if they’re not careful, they can end up eating into their principal
It’s like you’re generating great income on the front end but slowly eroding your portfolio in the background
That’s where an advisor can be really helpful. Managing a portfolio to balance both "explosive income" and protecting your NAV from erosion is tough. It’s easy to get caught up in chasing high yields, but a financial advisor can help you take a more holistic view. They can assess whether the income you're generating is sustainable or if it’s coming at the cost of long-term growth
Totally. But let’s dig deeper into this. Say I’m getting these high dividends or yield from something like REITs or energy stocks. What exactly is causing NAV erosion in those cases?
Do another one of these when there's more data on XDTE, QDTE, SPYT, QQQT, SPYI, QQQI, ISPY, IQQQ, YMAG, and YMAX. I would like to see the levels of nav erosion for all these funds and i think others would too
But just a quick check shows..QDTE initial $46.02. Now 42.25. = (-3.77 in NAV) but + 8.30 in DIVS. So you are net up $4.53. Nothing DRIPed.
please do a video on the highest yielding funds (20% plus) that have stable NAV over time. A few that come to mind could be SPYT, FEPI, QQQT
Exactly. All of those actually own the underlyings and sell spreads for income. SPYT and QQQT hold 95+ % of their value in actually owning the ETF's. so they are only using less than 10% of the fund to generate income. FEPI owns individual stocks and writes a lot of old school Covered Calls.
I like that idea!! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
@@AverageJoeInvestor I like this idea also! JEPQ and JEPI have also been good in my opinion
Xdte.qdte
Maybe also the new roundhill Funds QDTE and XDTE
Yup, these are for retired folks like me. Like lets take TSLY i am down 65,188 but i have collected 90,100 in divs. Technically i am ahead 24,912 and most of that went back to other funds or steady eddies like PDI, JEPQ, AIPI and FEPI. NAV erosion doesnt bother me much, but what your missing is these funds are based on the underlying. Tesla has had a tough couple of years, so yes it will have larger NAV erosion. As Tesla recovers the NAV erosion may actually go away and i will have my original capitol investment and all those divs for that time. Some of these i own like MSTY and NVDY have capitol appreciation too. Your right, for someone not retired you should be focusing more on growth like SCHD and VYM! Thanks for the video!
Wow. Thanks for this detailed content showing sustainability of these high distribution funds. We appreciate your efforts 😎
You’re welcome! You bet! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
Thank you for including SVOL
You bet! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
I am having mixed feelings about SVOL.
your Videos are much appreciated ! and Thank you for including SVOL! I own this one and am very pleased with its performance.
Awesome! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
SPYT is by far the best. 20% dividend and so far the nav is pretty dang stable. I mean when the market was down 12-15% it was only down like 5-6%.
Agreed. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
Only 6 months of history. Don't bank on it.
@@marksatterfield3100 agreed. We’ll see
Great analysis. This is the heart of the matter. I’m looking for the ETF with the highest dividends AND stable market price.
☠️
Sounds like you woke up singing the Eagles today
Brilliant video! All high yield investors need to see this!
And this is why SVOL is a Morningstar 5 star fund
4 star I just checked it
Hey Joe, could please do a video on those weekly distribution ETFs like QDTE, XDTE & RDTE to show how many percent of the distributions need to be reinvested to return to a value of $100,000? Thanks!
Could you do a side by side with XDTE, SVOL, GPIX, and GPIQ on this? I’d be interested in the results of that. Well done on this video, very informative:)
Don't forget QDTE.
does your spreadsheet include the additional income gained from the dividends from the additional shares when you reinvest?
Great video Joe! Would love to see this same concept with the NEOS ETFs SPYI, QQQI, IWMI and GPIX/Q to round out the five.
THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
These can be thought of as buying a annuity. Though with no guarantee but way higher yield
You’re not wrong as long as the income is pretty consistent. You bet! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
Agreed. More of an annuity.
You pump already taxed money in the front end and get your own money back at the rear end only now it is taxable. I was very attracted to these funds due to the income but watching the NAV erode away the capital turns my stomach.
So how much income did you get to keep at the break even point? We never got to see those final numbers and I'm dying to know!!
I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement, I'm 55.
Those sound like great picks! consider financial advisory so you don’t keep switching it up, top 3 payers for the month were $OHI, $KMI, and $EDP... not bad for 350k
You have a very valid point, I started investing on my own and for a long time, the market was really ripping me off. I decided to hire a CFA, even though I was skeptical at first, and I beat the market by more than 14.3%. I thought it was a fluke until it happened two years in a row, and so I’ve been sticking to investing via an advisor.
I'm intrigued by this. I've searched for financial advisers online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
I've experimented with a few over the past years, but I've stuck with ‘’Aileen Gertrude Tippy” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
SVOL was the only ETF I own that was up today (20-SEP-2024). But I still have more invested in SCHW and JEPQ. I just put about $1,300.00 (33 shares) in QDTE 3 weeks ago to see how it would do. Right now I'm up 1.82% ($25.13 Total gain) - reinvesting all my distribution.
XDTE 🎉🎉
You bet! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
So far, XDTE NAV is holding up relatively well. FEPI did at first too. Give it time, the erosion will begin. Most likely.
Great insights and so much effort.. awesome 👍
Good episode on how better use theses very high yield funds ! Only to use in taxes advantaged accounts !
All five of those have negative YoC. Could you do another video featuring MSTY, NVDY, BITX, NFLP and GOOP as they are all positive or nearly positive.
I agree! MSTY would probably blow these away.
I put my money in short term I wanted to leave nyc but keep my money (cause I would have spent every penny if I used it) used the dividends to pay bills while I started a new job and get established reinvested half maintained my principal (aka) life savings. Then sold and bought what I consider stable ETFs.
These high yield funds gave me the confidence, time and income to move while preserving most of my money. :)
I will always be thankful that these hit the market :) 🎉
The problem with these high dividend funds is that you are taxed on the dividend, regardless of re-investment or not. Add taxes to your spreadsheet...assuming someone is using this for income...and these all of a sudden turn quite ugly.
Not unless they are deemed “Return on Income”. No taxes on that.
Government will have their hands in our pockets no matter what we do.
Unless it’s a Roth IRA but yes taxes are going to happen. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
Neos ETFs and the Kurv income ETFs may be better choices for taking 100 percent of your dividends.
Exactly what I was thinking. Also JEPQ continues to shine.
Interesting. You bet! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
One thing to be mindful of is the fund's inception days and the not-so ideal market environment they could have been released in. For example, SVOL has shown erosion for those that got in during inopportune times, though I bought it August 5th, therfore my returns are ideal. Every fund may not be plagued with erosion. It could just be the market environment could have been less than ideal.
What’s your thoughts on high yielding CEF’s? My SVOL strategy is to buy when there’s extreme fear in the market. August 5th was the golden opportunity for SVOL and might not come again for a while.
do you think it would be a lot different if it were not a raging bull market? I own SVOL and the distribution is lower for Sept
Very valuable information!
Glad it was helpful! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
Great video. Why don’t you don’t include QDTE in the analisys
Too many different ETF’s to try, LOL. Maybe in the future. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
Interesting, do you know of any broker that allows you to set how much of your Dividend you want to reinvest in that same underlying security?
Just disable drip and reinvest manually every 3-4 months?
It would need to be manually done unfortunately. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
I think the most important thing is that the "absolute" distributions don't just go down over time (not yield). If the sequence of distributions is like 1.00, 0.89, 0.79, 1.01,.... It just mean it's not a straight line to zero, it fluctuates. I like doing a bell curve distribution graph with +/- 1 std deviation to evaluate those.
Can you do another video like this but with NVDY, FEPI, QDTE and XDTE? I appreciate the time and effort you put into this and have to say the presentation was amazing! Thank you.
I agree! Those hold their value much better.. also MSTY
Just discovered your channel and as a result these 'high yield' ETFs. To truly evaluate the risk vs reward of this investment strategy you need to calculate the net annualized return by year since inception as well as the IRR for various hold periods. For example, what's the net annualized return on SVOL if I reinvest at the net zero capital loss percentage of 27%? What's the IRR for a 1, 2, or 3 year hold period?
A follow up...I calculated the Inception to Date (ITD) annualized return and IRR for SVOL. The ITD Annualized Return is 10.05% and the IRR is 10.92%. In my opinion, that's OK but not great relative to the amount of risk being taken with this kind of investment strategy. What happens if we have a significant bear market? Since the inception of this ETF the SP500 is up 35.64%.
And this is during a very bullish market, all indices going up over 12% for the year. I suspect a lot of these high yield ETFs will never comeback to original NAV value, even with 100% reinvested, after any major stock market drop. Because after the drop the distribution will also be cut. Imagine if the market wasn't bullish, this would be much worse.
Just look at all the CC ETF’s NAV during 2022, absolute slaughter. These CC ETF’s are very dangerous but there’s more and more people investing in them. The only ETF’s that are worth it are DIVO and JEPI or JEPQ. Stay away from ITM CC ETF’s like QYLD, RYLD, etc. Those are complete garbage.
So while it lost some from inception SVOL has the last 2 yrs lived basically between 21.00 and 23.00, I buy it when it dips below 22.00 and have sold at a profit when it goes back above. The last 18 mon I haven't seen anything I would call NAV erosion.
It is...
I don't think these types of funds are meant to be bought and sold...
Ahhh we’re generally moving away from Yield Max …?
Not necessarily- I think there is a VERY LIMITED use case for them. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
Are you able to do a video on fepi, aipi and spyi? Those three seem to be extremely stable as well as they pay a fairly high yield
we need one more column for each situation/scenario: current total (NAV + distributions) vs the initial 100K.
Can we assume here that distributions are not taxed (sometimes 30% on dividends)?
great video, however before this new high yield etf came about, the golden rule with other funds was that you only withdraw 4% and reinvest the rest, so yes you have to reinvest in any fund you have or you will have nav erosion, this new etf has now increase the money you can possibly withdraw
THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
I hope you answer the methodological questions that are in the comments such as the price fluctuations in reinvesting dividends in shares …. What about if you reinvest 100% of the until you have received 100% of your original funds back-?
Biggest question with these funds is will the volatility remain over long stretches & how to deal with that instability in yields
You receive in dividends
check WEEI your thoughts?
Sad reality for these, although SVOL still doesn't look that bad. I came up with the same math, then subracted the erosion, or the reinvestment needed. It looks like the true yield for that one may still be around 11.5% which isn't exactly terrible for someone who wants passive income.
You seem to have an error in your spreadsheet. Your svol calculation for 50% reinvested is showing the exact same as 35%. I believe your reference cells need to be updated for 50%. Either way good content. 👍
Thanks for the feedback. I’ll get that updated. 🤦 THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
Great study, please do one for a 100% reinvestment (as in an IRA, so as to grow the account)
good video. very informing
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If you know the value declines, would it make sense to sell puts on the funds? Thx Andy
? You ll get assigned then. I sell puts on stocked I'm bullish on so I can collect the premium income without get forced to buy the shares (ie income play)
What about taxes? Unfortunately, I have to invest in Uncle Sam as well. Is there a website which calculates total return taking your individual tax rate into consideration?
Good info, thanks
You bet Mike! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
How does FEPI look?
Has NAV erosion
9/21/24 Thank you for doing the math on these - am 78 with no retirement - am NOT "poor" but with the economic strategies of our government - I want to better my situation. So, I bought 10 shares of ULTY on 9/16 and was paid $9.83 for my efforts on 9/20 - Because I have not done well in picking stocks - am currently wanting to see IF this strategy is viable for me. YES I will buy 11 more ULTY before 10/16 - am now going to buy SVOL -- BTW -- what you are sharing is NOT advice -- this is only for entertainment and mental stimulation - Bendiciones - y buena salud -- Will start going through your postings to see IF I am able to glean additional ways to earn income. Thank you -
I wish you would do the reinvestment for the trailing 12 months for all....and not since inception....much more real timelime
Could you add in CONY to this mix ?😊
can you add cornerstone to the mix?
I will like to see the same thing on QDTE and XDTE.
What is SVOLs dividend if you revise it downward by the 27% needed to maintain the 100k NAV?
General thoughts: Assumption - I want as much income as possible from the ETF in 5 years, (Reinvest 100% for 5 years). During this time the NAV most likely will fall and inverse split. But each time I reinvest, It's likely the NAV will be lower..This means greater share accumulation. If any ETF has say a $0.50 Dividend and I have collected a ton of shares, because of lower share. Why would you care about capital gain?
My favorite is the spyi
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I held JEPY for a little while. It was just a small position but I still got out after a few months. I got a 7% return overall. I think if there is a recession and the market tanks these get hit real hard.
What about Spyi NVDY, ISPY, qdte, xdte would be nice if you can do a video these? thank you
SVOL is the winner by far
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But you'll hardly have any income with SVOL unless you have 100k+
What about the tax you have to pay on the dividends?
Random unrelated to the Rtf’s…I been debating on hard on slowly buying into MPW and then running OTM covered calls as it (hopefully starts to recover) though I was still waiting to see some improvement to get a crazy low sub 3 average…unless it comes down again of course 😅
ETF’s* lol
this is crucial (perhaps life changing).
i am buying more svol and try to live off of svol distribution.
one point on tsly( btw, i am tsla bull): this really depends on when you initiated the coverage of tsly imo.
i think if you start to cover tsly now, things will look more optimistic going forward.
thanks.
Interesting. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
One trick is to buy the ETFs on Margin and have the huge Dividends pay it off. As for whether it's worth it, the decay for the last year with QQQY is 45%. If the Yield is 90%, then QQQY would have a 45% profit, no? Plus soon Defiance is paying Weekly instead of Monthly.
XDTE and SPYT so far no nav erosion and yielding 20-25%
Do a video on more reasonable 5 income funds:
GPIX
JEPQ
SPYI
JEPI
SPYT
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NAV-e is why I don't bother with these HYI-ETFs. I learned secured cash puts and covered calls from you and I'll stick with that.
As I’ve been using these high yield for cash flow - it seems that compared to high yield savings accounts and drawing cash out is the best comparison
Great video…you should add another column to these and show a 75% reinvestment and keeping 25% of the income…that’s my plan…thanks
Better to just buy the underlying and if you have enough when you retire, just borrow against it, then leave what's left when you die. Or just sell what you need for the year.
So why invest ?
Tbe net distributions in your 35 percent reinvestment are the same as 50 percent model. I think tneres an error there
Good video, but it's a little apples to oranges. SVOL has been out a whole 2 years ahead of the other funds, so of course comparing it since origination, it will look much better than the other two.
In fact, in terms of total returns, SVOL has done the worse out of JEPY, QQQY, and IWMY. I think if your data started by comparing the same dates for each fund (IE, either starting in September when comparing QQQY/JEPY and SVOL, or November for IWMY), then you'll have much different results.
All of this research is very good and practical, but the majority of it has been through a bull market. If these funds had been around in 2008, my gut tells me they really would get whallopped. Except for SVOL. I have a lot of faith in short vol as a strategy.
As an lnvesting enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?.
Well as you know bigger risk, bigger results, but such impeccable high-value trades are often carried out by pros.
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How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
Stacy Lynn Staples is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
Thank you for this amazing tip. I just looked the name up and wrote her.
Thanks
You’re welcome! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
Should do another video on this including etfs ymax nvdy qtde xqte
MSTY or NVDY would’ve blown these others away 😅
How can we call a fund "high yeild" of the NAV is going seriously down? Net is net, so to speak. High distributions that deplete the "principle" if you will, isn't high yield unless the total net return actually is high. Sounds like they are playing word games?
At the end of the day it's net that matters. Ideally with stable or increasing NAV.
I go a step further and say you don't have your first dollar of spendable proit until you have twice your maximum drawdown... plus $1...
That is to say... you drawdowns never go below your starting bankroll ever again. (Starting bankroll being equal to max. draw down.)
SVOL, the stock here with volitility in the name has been the most stable... Okay I give up lol
Iwmy best
Could you please add reinvesting 100% of capital in your next video? I do that with these funds.
Then they fail to become “income”. However, it would add to the investing amount over time.
They’ll only shine once the dividends are kept instead of reinvested.
Why cherry pick why not do nvdy, msty, amzy, fby , fepi or spyt dont fit the narrative??? They all crush SVOL and are very stable nav or have gained in nav
Didn’t necessarily cherry pick but gets overwhelming if you do too many. Maybe in the future. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
I appreciate all the hard work you put into this presentation, but couldn’t help myself to comment. I think the entire video was heavily flawed and skewed to prove a point with NAV erosion. With the exception of SVOL you picked 4 of the worst charts you could find. I think most that have really done due diligence on these funds realize there is no way you aren’t going to reinvest a huge portion of the dividend distributions in order to take advantage of the compounding effect over time. You also included TSLY, which isn’t indexed and when there is a decrease in the underlying (ie a sell off) of course the fund is going to decrease-but you never acknowledged the fact when Tesla has a breakout TSLY is going to increase significantly. Investors who are buying in right now are going to have a vastly different cost basis. In summary, I don’t think the presentation achieved the fair and balanced data you are looking for. I would try again in one year but next time pick different high yield funds.
TSLY is a meme ETF. You should’ve skipped including that one and analyzed JEPQ instead
FDUS ????
AMZY
And then there's taxes!
Touché. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
Xdte and mstry
The problem is your methodology. You did these all from inception. Some of these, if you went from Jan1st 2024 to now. You would have experienced zero NAV erosion. You would have actually seen NAV appreciation. I personally wouldn't be the first to buy a new fund.
That's really not an issue.
Granted when you bough4 matters as it always dose.
However they are sinking ships in yeildmax.
All the best funds are declining in time.
Picking TSLY is disingenuous and misleading. Tesla has been in a huge bear market. If you owned the stock you’ll be in the red. How about being honest and doing a review of NVDY and show the results. At the end of the day these are risky investments. If the underlying stock is performing well the covered called ETF providing income will hold its own.
…and let’s pay gobs of tax too!!! I wonder if these ETFs were created by the IRS… 🙄
IRS doesn’t set tax policy. Boneheads you vote for do.
Unless in a Roth IRA but yes… THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
TSLY hasn't even been close to 3 years
Pretty depressing seeing people pissing their hard earned money away
Nice work, Average Joe, but you're way too smart for the people in your comment section. You can lead a horse to water...Defiance and Yieldmax intentionally target the ignorant for management fees. People who waste their money on these 2 companies' funds do so on emotion. They could care less about reality and actual data like what you done. If they did remotely understand, they would have done this analysis like you already.
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TSLY is trash
I like the Kurv version of TSLA
Agreed TSLY is trash. I’ve moved out of most YieldMax funds and into XDTE and QDTE
@@accountingisfun9092 Khmer say you will get witch if you go all in on TSLY.
@@accountingisfun9092 Khmer says TSLY is the best and you will get witch wit da dibidends
TSLY will do well if Tesla does well. Tesla has had a rather poor year. So don't expect TSLY to blow it out of the water. Never forget the underlying's performance needs to be taken into account.
Horrible video in my opinion
Seems your biased against yieldmax as you easily could have included one of their funds that was based on an underlying that didn't absolutely tank to half value. Say NVDY. If you took that 100k at inception picked up 5k shares since it launched at $20 a share. It would have paid you out $21 roughly back in September and the nav is currently sitting at $23 a share. That means you would have been paid $105k in dividends plus your shares would have appreciated to $115k in value. Making overall your 100k investment worth $220k. TSLY was bad timing since the underlying absolutely tanked and was forced to do a reverse split. Plenty of their other funds are on track to same as NVDY as well.
Agree, would like to see NVDY and FEPI in same scenerio.
People forget these ETFs aren't much different than investing in their respective underlyings. It's not advisable to invest in TSLY if you're not bullish on Tesla. There's no free lunch. You gotta do your DD on the underlyings. Otherwise you will despair and sell at the worst time.
I can appreciate that perspective. Not biased against YieldMax but I do think the value they bring is very limited. THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
have you ever looked at ECAT or BCAT from BlackRock? great video thanks.