TSLY ETF inflows are rising, thanks to its risky ~50% yield
- The YieldMax TSLA Option Income Strategy ETF inflows are rising.
- They have jumped in all months this year because of its attractive yield.
- Analysts caution that the 50% yield has some risks.
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YieldMax TSLA Option Income Strategy ETF (TSLY) has become one of the best-performing funds this year as investors by its attractive yield. The fund, which was started in 2022, has had inflows in all months this year.
TSLY has now attracted over $667 million in assets. Data compiled by ETF.com shows that most of these inflows happened in August when investors added over $307 million in funds. In all, TSLY has had over $707.51 million net inflows this year while its Net has risen by 53%.
TSLY investors are attracted to its substantially high dividend yield. According to its website, TSLY has a dividend yield of almost 50%, making it one of the highest yielders in the industry.
YieldMax TSLA Option Income Strategy ETF is a fund that seeks to participate in the Tesla stock price gain while generating monthly income. It is able to achieve that by using synthetic Tesla covered call options contracts to generate returns.
In this case, TSLY’s covered call strategy has three parts. First, it has exposure to synthetic long exposure to Tesla, which helps it to participate in Tesla’s stock rally. It has also covered calls, which act as an insurance policy of Tesla shares. These covered calls are what the fund uses to generate income. Finally, the fund also invests in US short-term Treasuries.
TSLY has an extremely high payout yield, which helps it attract income investors and retirees. However, analysts caution that the fund has significant risks that could make the yield unprofitable in the long run. Also, the fund’s distributions tend to vary from month to month, mostly because of the volatility of Tesla shares.
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