🧵 ULTY "Death Spiral" from July 21, 2025: NAV Decline, Dividends' Role, & When to Expect Reversal

ULTY's NAV has declined ~11.85% since July 21, 2025 (from $6.33 to $5.58 as of Sep 3 close), sparking "death spiral" fears amid high yields (~85% annualized). Are dividends making up the difference? When might it reverse? Let's analyze data to Sep 3, 2025, causes, total returns, & outlook—it's not a spiral, but structural erosion in a tough period. 1/7. The NAV Decline: Data from July 21 to Sep 3, 2025

NAV history (daily closes):
- Jul 21: $6.33
- Jul 31: $5.90 (-6.8%)
- Aug 7: $5.91 (+0.2%)
- Aug 14: $5.75 (-2.7%)
- Aug 21: $5.74 (-0.2%)
- Aug 28: $5.67 (-1.2%)
- Sep 3: $5.58 (-1.6%)

Total: -11.85% over ~6 weeks (~2% weekly avg.). Recent "blood bath" days like Aug 19 (-2.88%) amplified, but trend gradual.

This slide follows post-revamp pattern (~15-20% ann. erosion), but accelerated by market weakness.

🧵 Frustrations with ULTY NAV Declining: Why It's Not a Growth Income Fund & NAV is Designed to Go Down – Educational Post

ULTY (YieldMax Ultra Option Income Strategy ETF) promises sky-high yields (~85% annualized as of Aug 2025), but its NAV has slid from ~$6.33 on July 21 to ~$5.61 as of Aug 22 close—a 11.4% drop in a month. This frustrates many investors expecting "growth income." But ULTY isn't built for NAV growth—it's options-powered for current income, where erosion is part of the plan. Let's explore frustrations, why it happens, & mindset shift 👇 1/7. Common Frustrations: "Why Is My Investment Shrinking?"

Investors vent on forums: "ULTY NAV keeps declining—feels like a losing bet!" or "Expected growth with income, but price drops while divs come." This stems from misunderstanding: People see high yields and assume NAV stability like dividend stocks (e.g., SCHD up ~2% YTD).

Reality: ULTY is an income fund, not "growth income." Erosion is structural—high payouts reduce NAV to deliver cash now.

🧵 Re-Evaluating ULTY Performance Since the New Strategy: NAV Decline Since 7/21/25 (Post-New Strategy Peak) & 10-Year DRIP Projections

ULTY's March 2025 strategy revamp (direct holdings, protective puts, credit spreads) aimed to stabilize the fund amid high yields. But with NAV declining ~9.5% since July 21, 2025 (from ~$6.33 to $5.73 as of Aug 19), is it working? Let's re-evaluate performance, causes of the slide, and run updated 10-year projections for $100K with 100% DRIP starting July 25, 2025, in bull, stagnant, and bear markets. Hypotheticals based on data 👇 1/9. The Strategy Change: What Happened in March 2025?

Pre-March: ULTY used synthetic positions, leading to heavy NAV erosion (~70% drop from launch Feb 2024 at $20 to ~$7 by March).

Post-Change: Shifted to direct ownership of 15-30 high-vol U.S. stocks (e.g., NVDA, MSTR), added OTM puts for downside cushion (~5-10%), credit call spreads for moderate upside capture, and flexible call writing. Weekly distributions started.

Goal: Boost income (~85% yield) while reducing erosion risks.

🧵 Why ULTY Must Distribute All Cash Before End of October: Educational Explainer & Shareholder Impact

YieldMax ETFs like ULTY operate on a fiscal year ending October 31, requiring them to distribute all net income & gains by then to maintain RIC status & avoid fund-level taxes. But what does this mean for holders? Let's break it down 👇 1/7. Fiscal Year Basics for ETFs Like ULTY

ULTY (and other YieldMax funds) has a fiscal year from Nov 1-Oct 31. As a Regulated Investment Company (RIC), it must distribute at least 90% of taxable income (dividends, interest, cap gains) annually to pass through taxes to shareholders & avoid 21% corporate tax.

"Distribute all cash": Refers to excess net income/gains not yet paid out via regular distributions—ensures compliance by fiscal year-end (Oct 31).

Not unique to ULTY—standard for many ETFs/mutual funds with Oct fiscal ends.

🧵 Building a Portfolio with ULTY for Ultra High Income: Best Funds to Pair & Why

ULTY (YieldMax Ultra Option Income Strategy ETF) delivers massive yields (~85% annualized as of Aug 2025) via options on volatile stocks, but alone it's high-risk. Pairing with complementary funds diversifies while chasing ultra income (50%+ total yield). Let's educate on strategy, top pairs, & a sample build 👇 1/8. Why Build Around ULTY? Core Strengths & Needs

ULTY shines for income: Weekly distros from covered calls/spreads/puts on 15-30 high-vol names (e.g., NVDA, MSTR). YTD total return ~13%, but vol ~30% & NAV erosion risks.

Pair to: Mitigate risks, blend yields, add stability. Goal: Ultra high income (50-100% portfolio yield) via diversified options/dividends. Avoid over-exposure to vol.

Diversify across strategies: Covered calls, single-stock yields, broad dividends.

🧵 Sharpe Ratio of $ULTY Since Strategy Change: Educational Analysis & Calculation

The Sharpe ratio measures risk-adjusted returns—key for volatile ETFs like $ULTY. Post-March 2025 revamp (direct holdings, puts, spreads), has it improved? Let's explain, calculate since then (Mar 1-Aug 9, 2025), & compare. Data as of Aug 10, 2025 👇 1/7. What is Sharpe Ratio?

Sharpe = (Portfolio Return - Risk-Free Rate) / Volatility (std dev of returns). Higher >1 = good risk-reward.

- Return: Excess over rf (e.g., 5% T-bills 2025).
- Vol: Measures swings—annualized.

For ULTY: High vol (~30% ann.) from stock picks, but strategy buffers.

Use monthly/daily for short periods like 5 months.

🧵 SCHD vs VOO vs ULTY: Battle of Dividend, Growth, & High-Yield ETFs – Which Fits Your Portfolio?

In a volatile 2025 market, these ETFs shine differently: SCHD for steady dividends, VOO for broad growth, ULTY for ultra income via options. Let's compare strategies, yields, risks, & performance to help you choose 👇 1/8. SCHD: The Dividend Stalwart

Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index—100 high-quality, dividend-paying U.S. stocks (e.g., HD, MRK) screened for consistency & strength.

Focus: Income + stability. ~100 holdings, large-cap bias.

AUM: ~$69B. Expense: 0.06%. Yield: ~3.95%. YTD Return: ~1.59% (as of early Aug 2025).

Best for: Retirees/income seekers wanting low vol.

🧵 Likelihood of $ULTY Reverse Split: Addressing a Common Investor Fear

With $ULTY's NAV stabilizing around $6 post-March 2025 strategy tweaks, fears of a reverse split persist. But is it likely? Short answer: Low probability (~5-10%) in the near term. Let's break down the myth, mechanics, & data 👇 1/7. What is a Reverse Split & Why Fear It?

A reverse split (e.g., 1-for-10) combines shares to boost price (e.g., $2 to $20), reducing outstanding shares proportionally. No value change—your stake stays the same.

Fear: Signals weakness, triggers selling, or hurts liquidity. For ETFs, it's often to meet exchange rules ($5+ price) or attract institutions.
But: Not always bad—can stabilize perception. $ULTY hasn't split yet.

🧵 Busting the Myth: Can $ULTY Really Go to Zero? A Common Misconception Debunked

High-yield ETFs like $ULTY (YieldMax Ultra Option Income Strategy) boast 60-80%+ yields, but skeptics fear NAV erosion will drive it to zero. Spoiler: That's a huge misconception. The odds are near-zero. Let's educate on why 👇 1/7. The Misconception: "High Yields = Unsustainable Decay to Zero"

Many think $ULTY's distributions (often 100% Return of Capital or ROC) eat away at principal until nothing's left. This stems from confusing ROC with "destructive" payouts in failing funds.

Reality: ROC is just a tax label for option premiums—deferring taxes, not signaling failure. It's sustainable as long as volatility persists for premiums.

Pre-2025, NAV dipped from high distros, but post-strategy tweaks (direct holdings, puts), it's stabilized ~$6.

🧵 What is AUM & Why It's Crucial for $ULTY Investors

If you're eyeing high-yield ETFs like $ULTY, AUM (Assets Under Management) is a key metric. It signals health, liquidity, & more. Let's break it down simply & explain its role for $ULTY 👇 1/7. What Exactly is AUM?

AUM stands for Assets Under Management—the total market value of all assets in a fund or ETF at a given time. For ETFs, it's the sum of investor money flowing in, managed by the issuer (here, YieldMax).

Think of it as the fund's "size"—bigger often means stronger.

🧵 Comparing YieldMax's Diversified ETFs: YMAX, YMAG, & How $ULTY Stands Apart in Detail

YieldMax shines with single-stock income ETFs, but their diversified lineup—YMAX, YMAG, & ULTY—offers broader exposure. All chase high yields via options, but strategies differ. Let's compare, with a deep dive on ULTY's unique active edge 👇 1/8. First: The Diversified Trio Overview

YieldMax's non-single-stock ETFs as of mid-2025:
- $YMAX: Universe Fund of Option Income ETFs
– AUM ~$991M, expense 1.28%.
- $YMAG: Magnificent 7 Fund of Option Income ETFs
– AUM ~$523M (est.), expense 1.28%.
- $ULTY: Ultra Option Income Strategy ETF
– AUM ~$2.4B, expense 1.30%.

All aim for monthly/weekly income, capped upside, full downside (mitigated). But ULTY isn't a fund-of-funds—it's actively managed on stocks directly.

🧵 The Most Financially Beneficial Way to Handle Taxes on ROC Distributions (Like in $ULTY)

High-yield ETFs like $ULTY generate big payouts, often as Return of Capital (ROC)—but taxes? Deferral is king. Let's explore why holding & deferring beats immediate payment or selling, maximizing your after-tax wealth. Plus: Can you defer ETF income? Yes, via account types! 👇 1/9. ROC Basics: Not Your Typical Tax Hit

ROC distributions (common in YieldMax ETFs) aren't taxed now—they reduce your cost basis. For $ULTY, recent payouts (e.g., July 2025): 100% ROC from option premiums.

Tax event? Only when you sell: Gain = Sale price - Adjusted basis, potentially long-term capital gains (0-20% rates). If basis hits zero, future ROC = gains.

YieldMax's guide: ROC = tax-deferred cash, not income.

🧵 Deep Dive: $ULTY's March 2025 Strategy Overhaul – How It Transforms Income Generation

YieldMax's $ULTY ETF revamped its approach in March 2025, shifting from pure covered calls to a tactical, resilient model. This addresses past NAV erosion while boosting income potential. Let's unpack each change, mechanics, benefits, & risks 👇 1/9. Background: Why the Changes?

Pre-March: $ULTY used synthetic positions (swaps) for exposure to 15-30 high-vol stocks, selling calls for premiums. But volatility led to NAV decay & uneven payouts.

March 2025 tweaks: Direct holdings, protective options, spreads, flexibility, & weekly distros. Aims: Better alignment, downside buffers, upside capture. Since then, AUM ~$1.6B, YTD returns ~15.6%.

🧵 Yield vs. Yield on Cost: Decoding These Metrics for Better Investing Decisions

In high-yield plays like $ULTY, yields can dazzle—but mixing up "yield" and "yield on cost" (YOC) leads to confusion. One's for new buyers; the other's for holders. Let's break down how to interpret them wisely 👇 1/7. What is Yield (Dividend Yield)?

It's the current annual dividend (or distribution) divided by the current market price, expressed as a %. Formula: (Annual Dividend / Current Price) x 100.

This shows what income you'd get if buying today. For $ULTY, it's ~60-80% based on recent payouts—super high due to options.

🧵 Debunking $ULTY ROC Myths: It's a Tax Classification, NOT Economic Erosion!

High-yield ETFs like $ULTY often show distributions as Return of Capital (ROC), sparking fears of NAV decay. But YieldMax has clarified: It's just tax treatment, not "true" ROC eating your principal. Let's unpack the facts & why it's often a win 👇 1/7. What is ROC in ETFs?

ROC is a tax label for nondividend distributions—cash paid out that reduces your cost basis, deferring taxes. It's NOT an indicator of fund performance or economic loss. For option ETFs like $ULTY, premiums from calls often get classified this way.

🧵 $ULTY vs $YMAX: Battle of YieldMax's High-Income ETFs – Which Fits Your Portfolio?

YieldMax offers killer income strategies, but $ULTY and $YMAX take different paths. One's a diversified stock picker with options flair; the other's a fund-of-funds powerhouse.

Confused which to pick? Let's compare strategies, yields, risks, and more 👇 1/7. First, what is $ULTY?

YieldMax Ultra Option Income Strategy ETF ($ULTY) is an actively managed fund targeting high monthly (now weekly) income via covered calls on 15-30 volatile U.S. stocks like NVDA or MSTR.

It holds the stocks directly for real exposure, sells calls for premiums, and uses tweaks like protective puts to manage downside. AUM: ~$1.61B. Expense: 1.30%. Volatility: ~4.59%.