ETF Education Report: TSMY

The YIELDMAX(R) TSM Option Income Strategy ETF (TSMY) is an ETF designed to generate income using an option strategy. Its most notable characteristic is a very high distribution yield of approximately 46.70%, paired with a strategy that focuses on generating cash rather than just tracking a stock's price.

What this ETF is trying to do

TSMY is an "option income" ETF. Instead of simply buying and holding a stock, it uses options to create income for investors. Based on its top holdings, the fund focuses heavily on TSM (Taiwan Semiconductor Manufacturing Company) options. This strategy aims to provide frequent cash payments to shareholders.

What the numbers show

When looking at performance, it is important to separate the share price from the total return:

• Price Return: This measures only the change in the share price. Over the last year, the price return was -4.31%. Year-to-date (YTD), the price return is 3.28%.

• Total Return: This reflects the overall return, including the cash distributions paid out. The one-year total return was 52.31%, and the YTD total return is 47.13%.

An estimated price from roughly one year ago was $16.77, compared to a current price of $16.05.

Income and Distribution Explanation

TSMY provides very frequent distributions, often occurring weekly. In the last 12 months, it has made 51 payouts, most commonly on Thursdays. The trailing distributions total $7.50 per share.

While the distribution yield is high (46.70%), beginners should know that a high yield alone can be misleading. It does not guarantee that the investment is growing; it only shows the amount of cash being paid out relative to the share price.

NAV Erosion Explanation

"NAV erosion" happens when the net asset value (the actual value of the fund's holdings) declines over time.

The supplied data is sufficient to evaluate price erosion, but it does not include enough historical NAV-per-share data to confirm or rule out NAV erosion. However, the price-based evidence shows an erosion score of 94, which is labeled as "Stable / sideways" with "good" severity. There is currently no severe erosion-risk flag for this ETF.

Top Holdings

As of October 8, 2026, the fund's portfolio is partial and includes:

• TSM Options: Various TSM call options (the largest being 17.91%).

• Cash/Government Obligations: First American Government Obligs X (6.65%).

Pros

• High Income: Provides a very high distribution yield.

• Frequent Payouts: Offers weekly-like cash distributions.

• Strong Total Return: The total return has significantly outperformed the price return over the last year.

Cons

• Price Decline: The share price has seen a slight decline over the last 12 months.

• Complex Strategy: Uses options, which are more complex than simply owning a stock.

Beginner Takeaway

TSMY is built for investors who prioritize immediate cash income over share-price growth. While the share price has dipped slightly over the past year, the total return remains high because of the large distributions. Investors should remember that high payouts do not always mean the principal investment is stable.