The Real Risks & Rewards of YieldMax ETFs: What Michael Venuto Wants You to Know
Michael Venuto explains how YieldMax ETFs like MSTY and ULTY work—covering NAV risks, taxes, and using them responsibly for income-focused investing.
YouTuber Marcos Milla recently had a chance to sit down with Michael Venuto, CIO of Tidal Financial Group, to chat about all things YieldMax and investing.
In this interview they unpack the truth about high-yield ETFs like MSTY 0.00%↑ , ULTY 0.00%↑, and YMAX 0.00%↑. From misconceptions around NAV erosion and Return of Capital (ROC) to practical strategies for using these funds in a retirement portfolio, Venuto shares what every investor should know before chasing weekly or monthly income. Whether you're new to YieldMax ETFs or already holding positions, this conversation brings clarity to some of the most misunderstood aspects of these income-focused ETFs.
Subscribe to Marcos, watch the full video, and check out the summary below.
Video Highlights
Core Concepts of YieldMax ETFs
YieldMax democratizes institutional strategies like covered calls and buy-writes, previously only available to high-net-worth individuals.
These ETFs are not just income vehicles, they are structured options strategies wrapped in an ETF format for retail investors.
Key Insights from Michael Venuto
Don’t risk your life savings on YieldMax ETFs (e.g., don’t take a HELOC to invest in MSTY). They’re not designed to be your entire portfolio.
The term "NAV erosion" is misleading. Declines in NAV are not structural decay, but the result of relative beta—i.e., the ETF moves similarly to its underlying high-volatility stocks.
Covered call income ≠ guaranteed profit. If the underlying stock crashes (e.g., MicroStrategy or Tesla), the ETF will fall too—sometimes almost as much.
On Taxes & Return of Capital (ROC)
Many investors misunderstand Return of Capital (ROC). It’s not literally returning your money.
Options income is classified as ROC by the IRS, but that does not mean the ETF is depleting its assets.
The SEC and IRS have conflicting definitions, creating investor confusion about how these funds are taxed and reported.
Portfolio Construction & Use Cases
Venuto recommends a barbell strategy: combine high-yield ETFs (like ULTY, MSTY, RNTY) with conservative, high-credit fixed income funds to achieve a balanced yield target.
He personally uses funds like ULTY, YBIT, GDXY, and RNTY in his own FIRE (Financial Independence Retire Early) income portfolios.
The Future of YieldMax
YieldMax is rapidly expanding and has built strong infrastructure, including a team of 30+ traders.
Venuto sees YieldMax ETFs as a new category, much like the rise of buffer ETFs or target-date funds.
Future innovation will be community-driven—they listen to retail investor feedback to guide product development.
What Investors Get Wrong
Thinking the ETF is "just returning their money" via ROC.
Assuming the income is risk-free or that NAV is protected.
Misunderstanding that these are active trading strategies, not passive investments.
Key Timestamps
0:00 MSTY ETF Review
0:18 Michael Venuto from YieldMax
1:09 The Truth of YieldMax
3:20 TSLY, CRSH, WNTR, MSTY
4:01 Tips for YieldMax Investors
4:50 NAV Erosion Explained
5:20 MSTY vs MSTR
5:30 YMAX ETF
7:08 YieldMax ETFs Future
8:18 Return of Capital Explained