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?
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!
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.
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.
BITO has treated me well. Huge monthly variable dividend. Bought just below 14 per share. I would not buy it at these levels but if there is a pullback I may consider getting more. I expect my entire position to be completely repaid within 2 or 3 months from the dividends.
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:)
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.
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!
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 :) 🎉
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.
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.
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.
Amazing analysis! Could you make a vid analyzing the returns of REX share ETFs like FEPI and AIPI? I'd love to see how they do. Thank you and awesome channel btw!!
So I'm at 34 year old I make 80k a year and I want a dividend income portfolio on my brokerage account to pay for monthly expenses so what would you recommend??
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.
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
You could regard many of these High Yield ETFs as royalty trusts where they are designed to distribute income for only a finite amount of time. I think it's plane they do this much faster and at much higher yields than royalty trusts, but same concept. The owned asset: a gold mine, an oil reserve, etc. is depleted over time, but the fund distributes income on the sale of those assets.
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 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
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.
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. 👍
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)?
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.
? 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)
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.
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.
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.
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?
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.
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?
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.
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 -
2 ways to play these high yield ETFs with massive NAV erosion. Place a BB on your chart of 1 std deviation and 21 EMA and in another color the BB w/ 2std deviation 21 EMA and use the 2 std deviation mid line not the 1, when the daily price closes above the 1 std deviation buy the high yield corresponding ETF If price closes within a short period of time below the opposite 1 std deviation eliminate your position but stay in or add if price comes down and holds the lower 1 std deviation and closes above the mid line. If there is a short option, do the same thing accept to the downside. If either fund ever has a candle body close outside the 2 std deviation and close back inside the 2 std deviation sell the account when it closes below the 1 std upper line or lower line if in a short instrument like crsh or fiat! These signals are from the actual underline stock not the high yield dividend account. Pay the dividends Always into your account and save up for the next leg higher once the signal reappears The other way is split money 50/50 in high yields with short trades on the same instrument like COIN with CONY and FIAT or TSLA with TSLY and CRSH
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 😅
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.
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.)
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.
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.
If you're young, why would you touch the distribution? If you invest 1k today in any of these 100% yields, in 5 years you have 500k. Just leaving it alone and reinvesting the distribution. I also like how you showed the worst of the cases. No one looking long term buys at inception. You give them a year to show proof and get data. I don't see these products as people investing who need money now. I see this as a product to sit and watch grow exponentially in 5 to 10 years. Around year 6-8 you are potentially a multi millionaire.
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%.
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.
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.
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.
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?
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!
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.
Was that a command or a request. Seems more like the former.
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
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! 😎👍
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! 😎👍
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
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
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.
And this is why SVOL is a Morningstar 5 star fund
4 star I just checked it
BITO has treated me well. Huge monthly variable dividend. Bought just below 14 per share.
I would not buy it at these levels but if there is a pullback I may consider getting more.
I expect my entire position to be completely repaid within 2 or 3 months from the dividends.
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.
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.
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! 😎👍
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!
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 :) 🎉
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.
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.
Brilliant video! All high yield investors need to see this!
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!!
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! 😎👍
Amazing analysis! Could you make a vid analyzing the returns of REX share ETFs like FEPI and AIPI? I'd love to see how they do. Thank you and awesome channel btw!!
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.
So I'm at 34 year old I make 80k a year and I want a dividend income portfolio on my brokerage account to pay for monthly expenses so what would you recommend??
Good episode on how better use theses very high yield funds ! Only to use in taxes advantaged accounts !
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.
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.
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! 😎👍
You could regard many of these High Yield ETFs as royalty trusts where they are designed to distribute income for only a finite amount of time. I think it's plane they do this much faster and at much higher yields than royalty trusts, but same concept. The owned asset: a gold mine, an oil reserve, etc. is depleted over time, but the fund distributes income on the sale of those assets.
If one doesn't need the income immediately, what do these etfs look like if a person reinvested 100% of the dividends during this time frame? Thanks.
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! 😎👍
Tbe net distributions in your 35 percent reinvestment are the same as 50 percent model. I think tneres an error there
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
Great insights and so much effort.. awesome 👍
I will like to see the same thing on QDTE and XDTE.
check WEEI your thoughts?
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
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...
How does FEPI look?
Has NAV erosion
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! 😎👍
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)?
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! 😎👍
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
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.
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! 😎👍
So why invest ?
What about the tax you have to pay on the dividends?
Great study, please do one for a 100% reinvestment (as in an IRA, so as to grow the account)
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)
XDTE and SPYT so far no nav erosion and yielding 20-25%
Why do people always say these are for retired folk? What if you aren’t retired but want income?
34 year old here and I'm trying to figure that out too.
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! 😎👍
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
can you add cornerstone to the mix?
Could you add in CONY to this mix ?😊
Very valuable information!
Glad it was helpful! THANK YOU for watching and for leaving your $0.02 in the comments! 😎👍
I wish you would do the reinvestment for the trailing 12 months for all....and not since inception....much more real timelime
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.
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.
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.
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?
Do a video on more reasonable 5 income funds:
GPIX
JEPQ
SPYI
JEPI
SPYT
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What is SVOLs dividend if you revise it downward by the 27% needed to maintain the 100k NAV?
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.
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! 😎👍
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?
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.
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
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 -
What about Spyi NVDY, ISPY, qdte, xdte would be nice if you can do a video these? thank you
2 ways to play these high yield ETFs with massive NAV erosion. Place a BB on your chart of 1 std deviation and 21 EMA and in another color the BB w/ 2std deviation 21 EMA and use the 2 std deviation mid line not the 1, when the daily price closes above the 1 std deviation buy the high yield corresponding ETF If price closes within a short period of time below the opposite 1 std deviation eliminate your position but stay in or add if price comes down and holds the lower 1 std deviation and closes above the mid line.
If there is a short option, do the same thing accept to the downside.
If either fund ever has a candle body close outside the 2 std deviation and close back inside the 2 std deviation sell the account when it closes below the 1 std upper line or lower line if in a short instrument like crsh or fiat!
These signals are from the actual underline stock not the high yield dividend account. Pay the dividends Always into your account and save up for the next leg higher once the signal reappears
The other way is split money 50/50 in high yields with short trades on the same instrument like COIN with CONY and FIAT or TSLA with TSLY and CRSH
My favorite is the spyi
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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
good video. very informing
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Conclusion study : 12:35
MSTY or NVDY would’ve blown these others away 😅
Good info, thanks
You bet Mike! 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
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.
FDUS ????
SVOL is the winner by far
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But you'll hardly have any income with SVOL unless you have 100k+
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.
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.
Thank you for this amazing tip. I just looked the name up and wrote her.
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.)
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.
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.
If you're young, why would you touch the distribution? If you invest 1k today in any of these 100% yields, in 5 years you have 500k. Just leaving it alone and reinvesting the distribution. I also like how you showed the worst of the cases. No one looking long term buys at inception. You give them a year to show proof and get data. I don't see these products as people investing who need money now. I see this as a product to sit and watch grow exponentially in 5 to 10 years. Around year 6-8 you are potentially a multi millionaire.
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%.
SVOL, the stock here with volitility in the name has been the most stable... Okay I give up lol
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.
Thanks
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TSLY hasn't even been close to 3 years
Xdte and mstry
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 then there's taxes!
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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.
AMZY
…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! 😎👍