Quick Read
-
YMAX's 62% yield paid weekly still left investors with a -4% total return, meaning its share price fell more than all distributions combined.
-
IWMI delivered a 14% total return and 15% yield by overlaying tax-efficient index options on a full Russell 2000 position.
-
RYLD's at-the-money calls capture maximum premium but surrender nearly all monthly upside, producing an 11% total return on $1.4 billion in assets.
-
Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now. The report is free. Enter your email and see if any of your stocks made the cut.
The YieldMax Universe Fund of Option Income ETFs( NYSEARCA:YMAX ), NEOS Russell 2000 High Income ETF( CBOE:IWMI ), and Global X Russell 2000 Covered Call ETF( NYSEARCA:RYLD ) paid trailing twelve-month distribution yields of 12.4% to 62.4%. All three share prices finished the past year lower. Two of the funds still made money for shareholders after accounting for payouts. The fund with the biggest payout still lost money.
A stated yield shows you how much cash left the fund. Total return shows you whether you actually came out ahead.
Total Return and Share Price Tell Different Stories
Net asset value, or NAV, is the total value of everything a fund holds, divided by the number of shares outstanding. A distribution means cash leaving the portfolio, so NAV drops by the same amount on the ex-dividend date. That is how a share price can fall while holders are being paid well.
Total return includes both pieces: the change in share price plus every distribution, assumed to be reinvested. A distribution yield just divides the past year's payouts by the current price. It measures cash paid out, which makes it a different number from a return.
Free Report, Just Released
The Top 10 Stocks To Buy Now
24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now . Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now.
The report is free, and you can see why we think each stock is a top investment today.
Enter Your Email and See the Ten →
| Fund |
Trailing Yield |
1-Year Total Return |
|---|---|---|
| YMAX |
62.4% |
-4% |
| IWMI |
15.1% |
14% |
| RYLD |
12.4% |
11% |
For the two Russell 2000 funds, the payouts more than made up for a small fall in price. YMAX went the other way. Its total return already includes every weekly distribution, so a negative number means the share price fell by more than all of those payouts were worth.
YMAX Had the Highest Yield and Kept the Least
YMAX is a fund of funds. It has other YieldMax ETFs, and most of those are linked to a single stock. Each underlying fund creates synthetic exposure to its stock with options and sells call options against it. A call option gives the buyer the right to purchase at a set strike price. The seller collects an upfront payment, called the option premium, and in exchange gives up any profits above that strike.
The July 31 filing listed 28 positions and about $386 million in net assets. The largest stakes, each close to 7%, were the YieldMax funds linked to Amazon, Snowflake and Apple. Other holdings follow Palantir, Moderna, Coinbase, Robinhood and Bitcoin.
Options on single stocks pay rich premiums because those stocks move a lot. That is how YMAX reached a 62.4% trailing yield over 52 weekly payments. The cost is that every underlying fund caps its stock's upside while taking on most of the downside. The fund-of-funds structure also layers acquired-fund fees on top of a management fee.
These distributions have become smaller. The first weekly distribution of 2026 was $0.088 per share, and the latest was $0.0563. The lineup also changes often. The number of positions fell from 32 to 28 between April and July. Buyers are signing up for the manager's rotation as much as for a strategy.
IWMI Delivered the Strongest Year of the Three
IWMI is the overlooked choice here, and it had the best year of the three. Its core holding is the Vanguard Russell 2000 ETF, about 100% of net assets in the June 30 filing, so shareholders own the full small-cap index. The managers then sell calls on the Russell 2000 Index itself, spread across more than one strike price, using what NEOS calls a data-driven call-option overlay.
The index options also bring a tax angle. NEOS relies on Section 1256 index options and puts its focus on tax-efficient monthly distributions. Expenses run at 0.68%.
Over the past year, IWMI paid a 15.1% trailing yield over 12 monthly payments and returned 14% in total, while its share price slipped.
The latest payout of $0.5728 was below the prior month's $0.6075, because the amount rises and falls with option premiums.
The main risk is small caps. A sharp drop in the Russell 2000 flows almost fully into NAV, and the premiums cover only part of the loss.
RYLD Is the Plain-Vanilla Small-Cap Buy-Write
RYLD runs the classic covered call: own an asset, sell a call against it, and collect the premium. As of July 31, it held the Global X Russell 2000 ETF at about 101% of net assets. It writes at-the-money monthly call options on the Russell 2000 covering the full position. Net assets of about $1.4 billion make it the largest of the three.
At-the-money strikes bring in the most premium but give up nearly all of the upside each month. The result was a 12.4% trailing yield, an 11% total return and a slightly lower share price. RYLD suits investors who want a simple, rules-based process. Over the same period, IWMI's more flexible approach made more.
Why Big Payouts and Slipping Prices Go Together
A fund that pays out more than its holdings earned makes up the difference from its assets, and the share price shows it. Selling options adds a second drag. In a strong rally, the calls cap the profits, so the price has little room to win back what the payouts took. In a selloff, the fund takes most of the loss. Over time, that uneven trade pulls NAV down even while the income looks regular (we laid out seven warning signs that a huge yield is about to crack in a free report on dividend traps).
Return of Capital Means Your Own Money Coming Back
Funds like these often treat part of their payouts as your own investment being handed back to you. IRS Publication 550 says these nondividend distributions show up in Form 1099-DIV, box 3. They lower your cost basis and go untaxed until your basis reaches zero. After that, any further amounts are taxed as capital gains.
How a fund's distributions are classified changes by fund and by year, so read each fund's year-end tax documents and distribution notices before including the income as earnings. A falling share price also shrinks the base that future payouts come from, which is why YMAX's weekly payments have already become smaller.
Which Income Investors These Funds Fit
For investors who want monthly small-cap income and can handle index-level swings, IWMI posted the strongest total return of the three, and RYLD is the simpler alternative. YMAX fits only investors who accept that a 62.4% yield still resulted in a net loss. Anyone who needs to protect principal, or wants something to stand in for bonds or cash, will find all three a poor match for that goal.
Got $1,000? Read This Before You Buy Another Stock
If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today.
They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research points to as the 10 best stocks to buy right now, and it's free. Read more here and see which stocks made the list -->>
Contact editorial@247wallst.com for any questions or corrections.
