Semi Newbie question about Funds ( High Yield ).

Fly100

Hello All,

While I have a basic understang about finds and distrubutions and how they work im trying to increase my portfolio income. I started to explore Dividend Funds and seem to consider single digit % returns once a quater is the norm.
However as you go down the rabbit hole I came across a few like the one below..

https://stockanalysis.com/etf/ymax/

It is fund with a weekly dividend and is currently running at 37% per anum, could someone give me an explanantion on how this works. It seems a high dividned and im ignorant to how this can sustain itself.

Many thanks,

Fly

masonic

Let me see. Launched less than a year ago, trades options to deliver the dividends, heavily dependent on underlying tech stocks. What could possibly go wrong?

Fly100

masonic said:

Let me see. Launched less than a year ago, trades options to deliver the dividends, heavily dependent on underlying tech stocks. What could possibly go wrong?

I agree if it looks to good to be true it usually is!

Im not looking to invest in it, im trying to educate myself on the subject.

masonic

Essentially they are converting rises and falls in the underlying stocks into income and paying that out. It will work for as long as they get these calls right. It's not a very tax efficient investment, as the dividends will be subject to US withholding tax at 15% unless you held in a pension and your provider was able to apply for gross distributions.

Bravepants

Seems great if you enjoy sleepless nights!

Rudyson

Fly100 said:

Hello All,

While I have a basic understang about finds and distrubutions and how they work im trying to increase my portfolio income. I started to explore Dividend Funds and seem to consider single digit % returns once a quater is the norm.
However as you go down the rabbit hole I came across a few like the one below..

https://stockanalysis.com/etf/ymax/

It is fund with a weekly dividend and is currently running at 37% per anum,
Fly

I think you'll end up paying through the nose

leosayer

It would be helpful if you could state why you looking to increase your portfolio income. 

Is it for current income needs or future needs?
Is it to meet a one-off expense or an ongoing one?

Hoenir

Losing money by investing in high risk strategies is a guaranteed way of educating yourself. Every new generation of investor searches for the Holy Grail of making a quick buck. As time passes you will come to the realisation that the boring words of wisdom are no fallacy.