ULTY vs. The YieldMax All-Stars vs. Indexes: Which $50,000 Investment Won in 2025? Are the YieldMax ETFs just all Hype?
- Jeff
- Aug 14
- 4 min read
Below is a year-to-date (YTD) comparison of two investment scenarios as of August 13, 2025. The first scenario involves investing $10,000 in each of TSLY, NVDY, APLY, MSFY, and AMZY for a total of $50,000. The second scenario is a $50,000 investment in ULTY. The calculations include all dividends and distributions to provide a total return for each investment.
We have also compared the results versus the performance of the 3 US Indexes for added comparison
Summary
As of August 13, 2025, the hypothetical investment of $50,000 in ULTY would have outperformed the diversified portfolio of five individual YieldMax ETFs. The ULTY investment would have generated a positive return, while the combined investment in TSLY, NVDY, APLY, MSFY, and AMZY would have resulted in a small loss.
It is important to note that past performance is not indicative of future results.1 The values presented are based on historical data and are subject to market fluctuations. This information is for illustrative purposes and should not be considered financial advice. Investors should conduct their own research and consult with a financial professional before making any investment decisions.
Are the YieldMax ETFs just all Hype?
The data in those two scenarios perfectly illustrates a critical risk associated with high-yield income ETFs, especially those based on single stocks.
Here’s why these results demonstrate that such ETFs might not be as good as they initially appear:
The "Yield Trap": High Payouts Can Hide Capital Loss
The core issue these tables expose is the critical difference between dividend yield and total return.
Dividend Yield: This is the income (the monthly or weekly payout) you receive relative to the share price. It's the number that often looks incredibly attractive, sometimes over 50% or 100% annually.
Total Return: This is the true measure of your investment's performance. It is calculated as:
(Change in Share Price) + (Dividends Received) = Total Return
The scenarios in the Canvas prove that a high yield is meaningless if you are losing more money on the share price than you are receiving in dividends.
How the "All-Stars" Portfolio Proves the Point
Let's look at the individual ETFs in Scenario 1:
YieldMax TSLA (TSLY): It paid an impressive $4.47 per share in dividends. However, its share price fell from $13.46 to $7.89—a loss of $5.57 per share. The high dividend was not enough to cover the price drop, resulting in a negative total return of -8.54%.
YieldMax AAPL (APLY): This was even worse. A modest dividend of $0.51 was completely wiped out by a price drop from $17.64 to $13.53, leading to a massive -20.46% negative total return.
This phenomenon is often called capital erosion or NAV decay. The fund's strategy (selling covered calls) generates high income, but it doesn't protect you from significant losses if the underlying stock's price falls. The premiums you collect from the options are just a small cushion against a much larger drop.
The entire "All-Stars" portfolio, despite some winners like MSFY, ended with a total value of $49,651.75—a loss on your initial $50,000 investment.
Why Did ULTY Perform Better?
The ULTY portfolio ended with a positive return ($54,145.80). This is because ULTY itself is a diversified fund of funds. Instead of betting on just one volatile stock like Tesla or Apple, it holds a basket of many different option-income strategies.
This internal diversification helped smooth out the returns. While some of its underlying positions were likely losing value (like its TSLY and APLY equivalents), those losses were offset by gains in other positions (like its NVDY and MSFY equivalents).
In essence, the two scenarios show that while chasing the highest individual yields can be very risky and lead to overall losses, a more diversified approach (like ULTY) can help mitigate that risk and produce a more stable, positive total return.
YTD Performance: ETFs vs. Major Indices
This table shows how the total returns of your hypothetical investments stacked up against the Index benchmarks.
Conclusion
Based on all the data and comparisons, here is the overall conclusion for some interested in these high-yield ETFs.
The Illusion of High Yield
The most important takeaway is that an extremely high dividend yield is often a warning sign, not a guarantee of great returns.
Many of these ETFs attract investors with promised yields of 50%, 100%, or more. However, as the analysis of TSLY and APLY clearly showed, this high income can be completely wiped out by a falling share price. This is the "yield trap": you receive large dividend payments, but the overall value of your investment shrinks because the fund's price is dropping faster than the income is coming in.
Total Return is the Only Metric That Matters
For any investment, the only number that truly matters is the total return, which combines the change in the ETF's price with the dividends you receive.
The "All-Stars" portfolio had a negative total return (-0.69%) because the capital loss on the shares was greater than the high dividends paid out.
ULTY had a positive total return (+8.29%) because its dividends were enough to overcome its more modest price decline.
This proves that focusing solely on the monthly payout is a mistake. You must look at the bigger picture to see if your investment is actually growing.
Diversification Reduces Risk, But Caps Reward
The final conclusion is about the trade-offs of diversification.
The "All-Stars" portfolio failed because it was a collection of high-risk, single-stock bets. When some of those bets went bad (like TSLY and APLY), they dragged the whole portfolio down.
The ULTY investment succeeded (in providing a positive return) because it was internally diversified. It spreads its risk across many different underlying assets, so the poor performance of a few was balanced out by the success of others.
However, this diversification comes at a cost. During a strong bull market, ULTY's strategy of selling covered calls meant it could not keep up with the major market indices like the S&P 500 and Nasdaq. By design, it sacrifices the potential for huge gains in exchange for generating income and reducing volatility.
In short, for an income-focused investor, a diversified fund like ULTY proved to be a much safer and more effective investment than chasing the highest yields from individual single-stock ETFs. However, for a growth-focused investor, simply buying a standard S&P 500 or Nasdaq index fund would have delivered superior returns during this specific period.
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