YieldMax Universe Fund of Option Income ETFs (YMAX): Why the Skeptics Run From This “Fund of Funds”

Do you like YieldMax’s exchange traded funds (ETFs) but are having trouble picking just one? Or maybe you just want a quick and easy way to diversify into a wide variety of YieldMax’s covered call funds. Either way, there’s a handy solution with the YieldMax Universe Fund of Option Income ETFs (NYSEARCA:YMAX).

Yet, even as YieldMax touts the benefits of its Universe Fund of Option Income ETFs, this “fund of funds” still involves a number of risks. Some commentators disapprove of the YMAX ETF, and they may have valid reasons for avoiding this particular fund. When all is said and done, you might also choose to steer clear of YMAX.

Many YieldMax Funds in One

To begin with, we should peek into the YieldMax Universe Fund of Option Income ETFs and see what’s in there. Take a look at YMAX’s holdings list and you’ll find a tiny allocation in “cash and other” assets. 

Also, as of August 11, 2025, the YMAX ETF includes a 6.48% weighting toward the First American Government Obligations Fund (FAAXX), which is a government-bond-focused mutual fund. In addition, the YieldMax Universe Fund of Option Income ETFs has small share and/or option positions in Moderna (NASDAQ:MRNA) stock and C3.ai (NYSE:AI) stock.

However, the vast majority of YMAX consists of shares of YieldMax’s covered call ETFs. Instead of directly holding stocks, these funds use sophisticated covered call writing/selling strategies to indirectly derive income from stocks.

The income is typically quite substantial, and that’s the main reason traders are strongly attracted to YieldMax’s covered call ETFs. Here are a few examples of the funds included in the holdings list of the YieldMax Universe Fund of Option Income ETFs:

• YieldMax PLTR Option Income Strategy ETF (NYSEARCA:PLTY); based on Palantir Technologies (NYSE:PLTR) stock; 4.08% weighting in YMAX ETF
• Yieldmax Meta Option Income Strategy ETF (NYSEARCA:FBY); based on Meta Platforms (NASDAQ:META) stock; 3.71% weighting
• YieldMax NVDA Option Income Strategy ETF (NYSEARCA:NVDY); based on NVIDIA (NASDAQ:NVDA) stock; 3.69% weighting
• YieldMax Gold Miners Option Income Strategy ETF (NYSEARCA:GDXY); based on the VanEck Gold Miners ETF (NYSEARCA:GDX), an ETF representing various gold-mining stocks; 3.68% weighting
• YieldMax JPM Option Income Strategy ETF (NYSEARCA:JPMO); based on JPMorgan Chase (NYSE:JPM) stock; 3.47% weighting

While browsing through the full holdings list of the YieldMax Universe Fund of Option Income ETFs, I found at least 28 different YieldMax ETFs. Thus, a benefit of the YMAX ETF is that it is somewhat de-risked because it’s diversified across many YieldMax funds.

High Yield, but Risks Persist

Along with its multi-fund diversification, the YieldMax Universe Fund of Option Income ETFs will entice investors with its eye-catching yield. As of August 11, the YMAX ETF advertised an annualized distribution rate of 65.09%. Not only that, but the fund pays out its cash distributions on a weekly basis.

The YMAX ETF offers an amazing yield and weekly payments, but there are risks to consider. For one thing, a long-term investor’s total returns will be reduced by the YieldMax Universe Fund of Option Income ETFs’ annualized operating fees of 1.28%.

Second, the YieldMax Universe Fund of Option Income ETFs doesn’t guarantee that it will maintain its current distribution rate in the future. Indeed, YMAX’s yield could drop dramatically, so it’s wise for investors to monitor the fund’s distribution rate for changes.

Furthermore, shareholders should keep a close eye on the share price of the YieldMax Universe Fund of Option Income ETFs. Many of the YieldMax funds within YMAX’s holdings list use option-trading strategies that limit their potential share-price upside.

Consequently, the share-price upside potential of the YieldMax Universe Fund of Option Income ETFs could be limited. Moreover, the YMAX’s share price may be subject to severe drawdowns.

The fund’s critics could point out that the YieldMax Universe Fund of Option Income ETFs’ share price declined 22.57% year-to-date as of August 11. In contrast, investors could simply have bought NVIDIA stock, Meta Platforms stock, and so on, and enjoyed substantial share-price upside.

Don’t Max Out on YMAX

Now, we can see why the skeptics are wary of the YieldMax Universe Fund of Option Income ETFs. There are notable risks that might outweigh the alluring yield of the YMAX ETF.

If you’re risk-averse, then you can avoid the YieldMax Universe Fund of Option Income ETFs altogether. Alternatively, you can limit your position to just a few shares of YMAX and thereby mitigate your risk.

The bottom line is that the critics have some valid points and it’s not wise to over-invest in the YieldMax Universe Fund of Option Income ETFs. Still, if you can stay small and stay watchful with your YMAX position, you may be able to safely invest in YieldMax’s fascinating “fund of funds.”

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