Core Insights - A new breed of ETFs is emerging that promises high dividend yields, often exceeding 50%, by holding single stocks like Palantir, Tesla, or NVIDIA and trading options on them [3][4] - These high-yield ETFs can be risky, as their substantial yields may not be sustainable and can lead to significant capital losses [4][5] ETF Performance and Risks - The YieldMax AI Option Income Strategy ETF (AIYY) claims a 71% distribution rate, but its actual 30-day SEC yield is only 4.8%, indicating a discrepancy between stated yields and actual income [6] - AIYY has experienced a total return of nearly negative 50% in 2025, raising concerns among investors about the viability of such high-yield strategies [5][7] - The YieldMax PLTR Option Income Strategy ETF (PLTY) has a stated yield of 49.4% and has returned 77.9% for 2025, but it lags behind the performance of the underlying stock, Palantir [8][10] Investment Strategy Considerations - Single-stock ETFs attempt to convert growth stock gains into dividends, exposing investors to the risks associated with individual stocks while offering less upside potential [11] - The YieldMax MRNA Option Income Strategy ETF (MRNY), which holds Moderna, is down 39% in 2025, illustrating the volatility and risks of these funds [12] - Investors may be better off purchasing the underlying stocks directly rather than investing in these high-yield ETFs [13] Alternative Investment Options - Closed-end funds (CEFs) provide a more stable and predictable income stream, often yielding more than 8%, without the extreme risks associated with high-yield ETFs [15] - CEFs can also offer discounts to net asset value (NAV), presenting potential for future upside, unlike single-stock ETFs [15]