The Most Underrated Income ETFs... Why Is Nobody Buying Them?!

[00:00:00]Hey guys, welcome to new video. So great to finally see a good day in the market for a change. It feels like we've had a few red days, a few bad days. We've been dipping quite a bit, but the Nasdaq was up almost 2% yesterday.

[00:00:15]Chippy, so semis, memory, look at this, dreamy and DRMP leading the recovery up around 10%. Interesting that dreamy is slightly beating DRMP. It's going to be very interesting to see this how how this plays out between the two of them, which one kind of starts performing better as we get a bit more uh kind of price action and knowledge of how dreamy is doing after, you know, two or three or four weeks of being in the market. Eggy, really nice recovery there, up over 8%. SPCI, that's really good cuz I bought the dip at $21.

[00:00:59]I think I said in my last video, one of my previous videos, I bought it $21 and now it's $22.99, up over 8%. So that's great. Blocks recovering nicely. Chippy, obviously that's great if you bought the chippy dip around $70. Congratulations. Or if you bought any of these, DRMP, let me know what you bought the dip on because it looks like it was a good move if it was in memory, space, chips, all of the above.

[00:01:24]Apart from ATDax, obviously so solid.

[00:01:28]But Altice, really disappointing, up only 1.32%.

[00:01:33]Um so just I was hoping for a much better recovery considering everything else recovered a much better than that. So for me, I hold it. I'm disappointed with that and it seems to be I just checked the holdings and it seems they've rotated. This is as of a couple of days ago, I believe believe as of the 20th. So it seems they've rotated out of the memory and kind of chip stocks and more into kind of crypto and Bitcoin. So, CleanSpark, Bit Mining, um that's obviously more Ethereum. Meta, Meta didn't have a great day. It seems like when the chips and memory stocks are doing well, it's kind of the inverse for software and the big tech like the Mag 7. They seem to not do as well.

[00:02:22]Roblox, Palantir, Palantir did not have a good day. Coinbase, actually Bitcoin is up. So, Coinbase actually did do pretty good as did some of the Bitcoin related stocks. AMD did well, but it's got rid of all of its uh I don't know what it had last week, but it's got rid of it definitely doesn't have much memory exposure or too much AI exposure apart from like Palantir software AI.

[00:02:46]So, seems like mhm it's tough, isn't it, with this actively managed stuff cuz you got to be got to get the timing right and be holding the right things at the right times. So, slightly disappointing in terms of Sorry, I call it all T. I need to remember to call it all tie as people have mentioned to me they get it confused when I'm referring between all tie from YieldMax and all tie from Xtrackers. But, yeah, I'm disappointed with that cuz I was hoping for a much better recovery cuz it does have a lot of upside potential, but it's got to be holding the right underlying stocks.

[00:03:15]>> [snorts] >> Anyway, in this video I'm going to talk about some ETFs that don't get talked about very much. Uh they're not very popular, but I think they're great options and I'm going to show to you in the performance how well they're doing and why I think they're they're a great option. They are single stock ETFs, um but that's what I'm going to talk to you about today cuz I do think that they are great options. So, before we do that, this is not financial advice. This channel is purely based on my thoughts as I navigate my own personal investment journey. Please please always do your own research. So, let's just get straight into it. We've talked about all tie. Now, we're going to go to YieldMax, oh everyone's favorite. Let's trash YieldMax. No, because lots of people don't talk about these, but these are the YieldMax light balanced potential income single stock ETFs.

[00:04:05]>> [clears throat] >> Now everyone knows YieldMax as being like heavy, high-paying distribution single stock ETFs that pay out too much yield and have nav erosion. But of course we know that they also have their kind of more balanced basket ETFs like chippy, GPTY, SOX E, the target 121 SOX E, way less nav erosion, way more growth. And that's what this is kind of addressing. It's trying to get more growth, less distribution, so a much lower distribution rate targeting 25% and therefore way less potential for nav erosion because they're able to capture the upside of the underlying stock a lot more because they're only targeting a much smaller distribution rate. So, these are the moderate income single stock ETFs. They write call spreads on individual stocks to target consistent distributions, so 25% that's what they're targeting, while preserving more room for price participation. So there's more upside potential. It's not as capped as your Misty's, your Coney's, your SMCY's, your NVIDI's, NVDY's, all of those guys. They're they're not going to pay as much distribution, but you're not going to have as much erosion because of it. They're going to have more participation to the underlying.

[00:05:25]These funds are designed for investors who want current income and greater exposure to the underlying stock's growth potential. This is what the YieldMax people and a lot of people in the space cried out for, and yet they've been around for 6 months and they're not popular. And it's like, why? And we'll talk about the performance in a minute because I think they're great options.

[00:05:47]Um so, this is for investors who want income without sacrificing upside exposure and who want to limit the downside. Like more limit on NAV erosion.

[00:05:57]Uh, less susceptibility, I guess, to NAV erosion.

[00:06:01]These funds are for investors who believe in long-term potential of individual stocks and want some income on top of that conviction. A more moderate distribution target, which I think is the sweet spot. Like we've talked about in a lot of my previous videos, I think around 30% is the sweet spot of distributions. You don't If you want If you're getting higher than 40%, 50%, you're really becoming so susceptible to NAV erosion and and NAV decay because obviously that distribution has to come out of the share price.

[00:06:30]And so when that happens, if you're not going through a mega bull run, you're always going to have some kind of erosion that the price has got to come out of it. So there's always going to be some kind of price decay unless you're got you're you're on a never-ending bull run, which never happens, of course.

[00:06:44]So this is a more moderate um, distribution target means more room to participate in price appreciation. A bet- a better fit for investors who see income and growth as two sides of the same coin. This is what I'm always talking about, income and growth. I'm always wanting growth and income. And when I buy the Roundhill Weekly Pay ETFs, you've got to buy them in fear or extreme fear or in dips and corrections because if you go down If you buy them at the top and they go down, you're going to get absolutely crushed. And but they are growth and income, so you've got to buy them at the right time. If you buy the Roundhill Weekly Pays in these kind of deep corrections or when they're near 52-week lows, then you can really ride that up and really get a lot of growth from them as well as income.

[00:07:23]Okay, so they've only got three and I wish they had more. So they've got a MicroStrategy one, they've got an video one, and a uh, Tesla one. And I love the video. I think this is like such a NVIT, I think, could potentially be a core single stock ETF of anyone's income portfolio. I mean, it is Nvidia is of course the heartbeat of AI. It's making so much money. It's got fingers in all the pies. It's investing in all the AI infrastructure companies.

[00:07:53]It's just an absolute monster. And I think this is a very good option. So, they've only got these three and they're not been doing great, all right? Obviously, MicroStrategy has been tanking for the last almost a year now.

[00:08:06]Uh Nvidia's been kind of choppy and Tesla's not been doing very well. But anyway, let's compare the compare the performance between their competitors. So, we've got NVIT, that is the target 25 one. We've got NVIDI, which is the other YieldMax one, the higher yielding version.

[00:08:24]Uh NVDW, the Roundhill weekly pay one.

[00:08:27]NVII, which is the one I really like from Rex Shares, which kind of fluctuates its uh leverage depending on what's going on in the market, but it's generally like keeps in keeps up in line with the Nvidia share price or not share price, but in terms of total return. I really like that one. NVYY, don't even bother.

[00:08:47]GraniteShares, it sucks. Just you know, we've talked about GraniteShares I've talked about a lot.

[00:08:53]They they're awful. You know, when people say YieldMax suck, I'm like uh I just don't think people are doing enough research. But I've researched GraniteShares a lot and they truly are I know they've changed their strategy a bit recently. The reason they're crap is because they one, they pay out too high a distribution, too high yields.

[00:09:13]And then so that obviously has to come out of the share price, but also they don't capture upside. Like look at this, it goes from here to here. These are all getting all that upside and GraniteShares has gone nowhere because they don't they capture like I think maximum 10 20% of the underlying stock's upside. It's just crazy.

[00:09:31]Anyway, this isn't a GraniteShares video.

[00:09:33]Uh I'm not here to bash GraniteShares even though if you're holding them, please reconsider your position.

[00:09:39]Not financial advice. All right, so if we look at max time frame, so it's from the end of November or beginning of December, this is total returns across all five. We'll see that NVIT, the Target 25 ETF from YieldMax, is winning that battle, up 17.49%.

[00:09:57]It's beating NVY, which has historically been my favorite ETF for Nvidia. Um and then NVDY's done pretty well as well, NVDW, and then of course your GranShares, don't even bother talking about that.

[00:10:09]Okay, so great, good performance from NVIT, it's beating the competition. What about price change? Now, this is the important thing because you'd want to get into these if you're only getting a 25% compared to like a 50-60% distribution, you want to make sure that your NAV and your price change is probably pretty good.

[00:10:28]So, if we go to price change, what do we see? Well, it's clear. The fact that you're getting a lower distribution for NVIT, that Target 25-25% distribution rate, means that the NAV is able to stay much more stable, there's way less NAV erosion, and you're able to just not take as much out of the share price, and it's way more sustainable. So, it's actually positive. Okay, 0.3% is flat.

[00:10:52]It's flat. But, you've been getting 25 um percent distributions paid Is it weekly or monthly on these guys? I think it's weekly.

[00:11:04]Um cuz I don't hold it. I don't know.

[00:11:08]Doesn't say. Let me know uh if you hold them if they're weekly or monthly. I know people really care about that. Me, I don't. As long as the total return's good, there's not huge amount of NAV erosion, I'm good.

[00:11:19]So, NVIT, um yeah, way less NAV erosion than the rest. Look at NVY, GranShares one, down 42.5%. Are you kidding me?

[00:11:27]Like, NVDW, which is leveraged with a an extra 20% exposure, is not even down half of that. Like so bad from GraniteShares.

[00:11:36]Anyway, you can see the rest of them doing, you know, not too great, but the the NAV, the share price has really held up for the NVIT, the Target 25 version. So, I think this is a great option for people that really want to protect their capital more, that are worried about NAV erosion, and are okay with getting a slightly less distribution. I think 25% is still a great yield. Um, you know, around that 25-30% around those that GX pays 24%, BLOK pays 36%, CHPY pays between 40-45%. I think CHPY at 40-45% should be the max that we're kind of aiming for. Of course, you can you know, I hold NVDW, but cuz when we eventually like if we hit earnings for Nvidia and it ramps up massively, of course, NVDW's going to be the best. But let let's look at Okay, let's just take this as an example. See, this is a low point here. And we'll see what does best from a low to a high, and we'll see it here.

[00:12:35]Yeah.

[00:12:36]All right, go.

[00:12:37]So, we can see that if you're buying in a low, NVDW is the clear winner. Right, it's up 41% in that time frame. And that's why you kind of you're either swing trading the Roundhill Weekly Pay ETFs or you're just holding through, you're buying into the dips, and you're holding through, and just holding and collecting the distributions.

[00:12:57]Um, which is probably what most people should be doing. Swing trading is you know, you should do that with a cyclical um underlying stocks like MicroStrategy, MSTW, COIN, maybe even Who, Robinhood, don't know.

[00:13:11]Um, memory, possibly.

[00:13:14]Okay, so yeah, in a in a bull market, if you're buying like into extreme fear and in corrections, then NVDW's probably the better play. But if you just want to buy and hold something, protect your NAV, low NAV erosion, uh collecting a nice 25% distribution, then I think NVIIT is probably the best bet. I think it's done real well.

[00:13:35]Okay, so that's Nvidia. What about the next one, Tesla? Now, Tesla's not done so well recently at all.

[00:13:42]Total returns are actually down for every single one. But again, TEST, which is the target 25 Tesla ETF from YieldMax, just down 1%. TESL has held up pretty well, down 2%. And I guess this shows that the YieldMax the ideal conditions for the YieldMax single stock ETFs at least is like a choppy sideways kind of price action.

[00:14:05]Even it performs better with downside because it doesn't have the extra exposure, doesn't have the extra leverage that like a Roundhill does, and you know, TSYY.

[00:14:16]That's GraniteShares, enough said. But yeah, so down 1.2%. If we change it to price change, then again, TEST holds up much better.

[00:14:26]It's still down 15% because the underlying Tesla's not been doing very well, but it's down way less than the rest. You know, the GraniteShares one down 56% whereas TEST's only down 15%.

[00:14:36]That's a huge disparity. So, just something to bear in mind. If you if you want to protect your capital and net erosion is is a worry for you, and I think it is becoming more of a concern for most income investors, TEST is a great you know, depends on your thoughts on the underlying, but the target 25 ETFs, I hope they they launch more.

[00:14:56]But they are a much better strategy than especially in a choppy sideways market or a market that's not looking so good, that's kind of got some down downside price action, downward price action. So, TESL, TSLW not doing well, TSII doing worse than TSLW.

[00:15:15]That's interesting.

[00:15:18]And then the last one is MicroStrategy. Now, this one's going to be even worse because obviously since that time when they launched at the end of November, MicroStrategy's been terrible apart from this little This is Well, this was quite a nice run.

[00:15:32]I don't even really remember this. Oh, it was out of the low from that extreme fear phase at the end of March. So, it was a nice run. But, overall, um MISTY actually holding up the best.

[00:15:46]Um MTYY, which is the Target 25 one, down 46%. MSST down 40 Oh, no, sorry. MSST is the um uh Target 25. Sorry, I'm getting confused there. MTWY is the GraniteShares. The GraniteShares got second place.

[00:16:03]What? I never would have guessed it. How did it do that?

[00:16:07]Crazy. Um MSTW down the worst, 58%. So, it's hard to hold any of these. I mean, none of them are good. But, if we go Let's just have a look at what happens when we see a nice little recovery.

[00:16:20]We'll see that. Oh, it's not really showing 72%.

[00:16:25]It's not really showing it. MSTW clearly wins MISTY, MSST, and then MTWY. This shows what the GraniteShares ones capture in a bull market. So, this is MicroShares been going down, and that's why MTWY is not because it's just going down with it. But, look at when it comes to recovery. 72% if we look on the right-hand side, it seems to not be going on the points here.

[00:16:49]It's not letting me click. Okay, 72% for MSTW going up recovery, and only up 8% for MTWY, the GraniteShares version.

[00:16:58]This is crazy. Like, it just doesn't capture upside.

[00:17:02]Uh MSST and MISTY pretty similar, around 40%. Um but, again, I I just think that's a real They're really good options for, if I said before, never ocean uh price decay is a concern, and you're happy with the 25% uh distribution rate, I think it's a much more sustainable thing to invest in for the long term. Um so I might even consider getting into NVIT myself as a more of a long-term play just to hold just have exposure to Nvidia and get 25% yield on top of it.

[00:17:33]But there is a butt here.

[00:17:36]They're not popular. And that, as we know now, is an issue because AUM is an issue. As- assets under management. Because we've had a lot of ETF closures. We've had a lot of liquidations within both YieldMax, Rex Shares, Bitwise, and what was the other one recently?

[00:17:57]Wasn't Amplify?

[00:17:58]Uh with the SPCE one. Uh Tuttle Capital they even had some liquidations.

[00:18:02]So these you know, and I double-check these figures. Obviously, these are going to change all the time. So these are only can be taken as rough estimations. But under all of them are under 10 million in terms of AUM. So NVIT is the most popular at 8.5 million.

[00:18:20]Uh Test. Sorry, fire alarm's going off.

[00:18:24]Sorry. Hold on.

[00:18:26]Sorry about that. Fire alarm went off.

[00:18:28]Um but yeah, all of these, especially like MSFT, 1.1 million.

[00:18:33]Terrible. So this is a concern because AUM, anything under 10 million with assets under management, is a red flag. And it is a potential concern for liquidation, for closure of that ETF simply because it costs a lot to manage them for these issuers, and costs a lot for them to operate it. So oh my god, that fire alarm's going off again. So anyway, that is a massive red flag.

[00:19:02]And um yeah, it's put me off. Uh massive red flag. So something to bear in mind. If these start to trend upwards, like if people suddenly get into NVIT, uh and it starts trending upwards, it's like 10 million next month, 15 million, then that's okay. I'll be happy with that.

[00:19:18]But these two in particular I'd be very wary about. So, it's unfortunate because I hope I really like the strategy. I think this is the way the income space is going, protecting your capital, less NAV erosion, lower yields. We shouldn't be chasing the yields. We shouldn't be chasing the GraniteShares 100% distribution rates. It's crazy. It's not sustainable. And I think this is a much better strategy from YieldMax, which is really an answer to everyone's concerns and queries about NAV erosion and YieldMax is losing all your money. And this is this is the answer, but no one's no one's bought into it. Um So, anyway, let me know your thoughts on this.

[00:19:57]Do you own any of these? Do you like them? Do you think they should add more?

[00:20:01]Does the AUM concern you? It concerns me.

[00:20:04]But maybe if it's trending upwards, it's it's an okay you could start just DCA'ing into it a little bit.

[00:20:11]But yeah, I'd love to know your thoughts. What else you buying in the market at the moment?

[00:20:15]Um yeah, let me know what you are doing in the income space. Otherwise, guys, I'll leave it there. I'll see you in the next one. Cheers.