The YieldMax AI Option Income Strategy ETF (AIYY) has garnered attention with an eye-popping yield of 227%, but the reality is far more complex. While the ETF’s website cites a more conservative 60% yield based on recent payments, it employs a high-risk options strategy centered around C3.ai (AI), which it does not own. This focus on a single stock exposes investors to significant idiosyncratic risk, especially given C3.ai’s steep decline of 50% over the past year.
Despite the allure of high income, the ETF’s performance has been disappointing, with a steady price decline since its late 2023 launch. Even reinvesting dividends would have resulted in a staggering total return of roughly negative 75%, making it a poor choice for dividend investors relying on income.
For those seeking reliable income, alternatives like Schwab U.S. Dividend Equity (SCHD) and SPDR Portfolio S&P 500 High Dividend ETF (SPYD) offer more stability and a stronger performance history, despite lower yields.
Source: fool.com