Is ULTY’s 84.23% Yield Real or Just a Mirage?

There’s high yield, and then there’s really high yield. One of the highest-yielding exchange traded fund (ETFs) you’ll probably ever see is the YieldMax Ultra Option Income Strategy ETF (NYSEARCA:ULTY).

The advertised annual yield for the ULTY ETF might compel you to immediately buy a boatload of shares, but please be careful. I’ll admit, pouring your investable capital into the YieldMax Ultra Option Income Strategy ETF might get you good results if you’re lucky.

Yet, it could also bring financial losses if your luck runs out. So, let’s consider why the YieldMax Ultra Option Income Strategy ETF’s jaw-dropping yield could actually be a mirage when all is said and done.

ULTY’s 84.23% Yield Is “Real” for Now

At the time of this writing, the YieldMax Ultra Option Income Strategy ETF advertises a distribution rate (which is similar to a forward annual dividend yield) of 84.23%. This yield is “real” right now, but with a major caveat.

There’s no guarantee that the ULTY ETF’s distribution rate will be 84.23% in the future. The fund’s yield could be quite different in a week, a month, or a year.

In other words, there’s no false advertising here with the YieldMax Ultra Option Income Strategy ETF, but you should definitely read the fine print. The fund’s distribution rate is subject to change, and investors should frequently monitor ULTY’s yield for fluctuations.

Besides the eye-popping distribution rate, another enticing feature of the YieldMax Ultra Option Income Strategy ETF is that it pays out its distributions on a weekly basis. You might notice that ULTY’s weekly cash payouts have declined from more than $1 in 2024 to less than $0.50 in 2025.

Since May of 2025, the fund’s most recent distributions have all been around $0.10. However, the YieldMax Ultra Option Income Strategy ETF still has a current annual distribution rate of 84.23%. This suggests that the ULTY share price must have declined sharply since 2024, so let’s investigate this hypothesis.

Weighing ULTY’s Major Risks

There’s no free lunch in the financial markets, and the YieldMax Ultra Option Income Strategy ETF’s sky-high yield comes with substantial risks.

To see what I’m talking about, let’s compare ULTY to the NEOS NASDAQ-100 High Income ETF (NASDAQ:QQQI). The QQQI ETF currently advertises a 14.65% distribution rate, pays monthly, and provides direct and/or indirect exposure to roughly 100 stocks with a focus on the NASDAQ 100 index (you can check out my overview of QQQI here).

As you can see, the QQQI share price has moved up over the long term even though the fund paid out decent distributions along the way. Now, let’s see how ULTY has performed since its inception on February 28, 2024.

Clearly, the YieldMax Ultra Option Income Strategy ETF hasn’t held up as well as the NEOS NASDAQ-100 High Income ETF. Sure, the price of ULTY has increased since April of this year, but the same thing could be said about QQQI, the NASDAQ 100, and the S&P 500.

Prepare for Unexpected Results

At any given time, the YieldMax Ultra Option Income Strategy ETF may use covered call selling strategies to generate income. This could limit the upside potential of the ULTY share price even if Applied Optoelectronics stock, Advanced Micro Devices stock, and Applovin stock rise sharply.

Furthermore, if those stocks (Applied Optoelectronics, etc.) drop rapidly, the YieldMax Ultra Option Income Strategy ETF could quickly lose value. Along with that, there’s the risk of a deep cut in ULTY’s distribution rate.

On top of all that, the YieldMax Ultra Option Income Strategy ETF deducts 1.3% worth of annual operating expenses from the share price (after a 0.1% fee waiver is applied). So now, we can see that there are multiple total-returns downside risks to ULTY.

Sure, the YieldMax Ultra Option Income Strategy ETF has done well during the past several months. However, its share price (according to Yahoo! Finance) has fallen by around 28% year-to-date, 49% during the past year, and 68% since February of 2024.

In the final analysis, I wouldn’t necessarily call ULTY’s 84.23% distribution rate a mirage, but investors should prepare themselves for unexpected results. There’s no telling where the YieldMax Ultra Option Income Strategy ETF’s share price might end up or what the fund’s distribution rate may be in the future.

Hence, if you still want to buy the ULTY ETF, consider only purchasing a very small number of shares. Then, to provide more diversification to your portfolio while still receiving regular income, you could add some shares of the NEOS NASDAQ-100 High Income ETF and other high-yield funds.

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