This High-Yield ETF Beats SPY
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People fear change.
And in the age of social media, people fear it even more.
Because now we have an infinite number of outlets to help us cling to the good old days.
But trying to hold on to the past may be our fatal flaw.
Maybe the fear of change is costing us money.
For decades, I've heard that index funds are the only way to invest and that no one can beat the market.
Just buy SPY and you'll never cry.
And then, just in the past two years, everything started changing.
What changed it?
Money.
Income.
Recently, people have started to realize that money coming in is better than paper profits we can't spend and might evaporate instantly if the wrong tweet comes out or one country attacks another.
And, thus, high-yield was born.
People young and old have flocked to ETFs that will pay them a lot of money every week or month.
What's the poster child of this movement?
Yieldmax.
People hate Yieldmax. Oh, how they hate it.
Well, the people clinging to index funds and 2% dividend stocks do.
Millions of others are pouring money into Yieldmax, and the company is growing by leaps and bounds:
Yieldmax is up to #30 and is now bigger than Nuveen and BNY Mellon, just to name a few.
Even so, the anti-change movement will tell you that Yieldmax products might give you some worthless money each month, but the NAV will erode to nothing.
Your principal will end up in the sewer if you go with Yieldmax--and that's why we'll never change!
Will it, though?
Let's check it out.
To compare, we'll use Yieldmax's flagship product, YMAX.
This ETF puts all of the company's risky ETFs into one high-yielding basket. You don't have to choose anything, the ETF does it for us. And if the company adds any new products, they'll automatically be added in.
As of this writing, YMAX yields 60%.
Yikes.
That's too much yield. That ETF is going down the toilet.
We'll see.
Here is the total return of YMAX so far in 2025. Remember, we've seen one of the fastest crashes in history already this year.
Here are the results:
Hmm, it's up 4.45% on the year. And what about sacred SPY?
YMAX is beating SPY.
Let me say that again. If you wanted to use high-yield to simply beat the market, you would succeed.
And what if we go all the way back to YMAX's inception?
YMAX is still beating SPY, 31% to 29%.
At the moment --and for the past year and a half-- a high-yield instrument has produced more total money than an old school index ETF.
Crazy, right?
Change is scary. And, sometimes, change is awful (like tennis after Federer).
But when it comes to beating the market and producing income we can actually use, maybe change is exactly what we need.
Talk to you soon.
