NVDY vs TSLY: Which Is the Better Pick in 2026?

Overview

NVDY and TSLY are single-stock covered-call ETFs from YieldMax that sell call options on NVIDIA and Tesla respectively, distributing the premium income weekly. Both funds track the price of their underlying stock but cap upside in exchange for high current yields—TSLY at 52.72% annualized and NVDY at 39.56%. The critical difference is that TSLY's higher yield comes with greater call-writing frequency and tighter strike selection on a more volatile underlying.

How they differ

Both use identical covered-call mechanics and charge the same 1.01% expense ratio, but TSLY's 52.72% distribution rate is substantially higher than NVDY's 39.56%, a gap that reflects Tesla's higher implied volatility and the fund's more aggressive strike selection. TSLY launched nearly two years before NVDY (November 2022 vs. May 2023) and manages $823M versus NVDY's $1.43B, meaning TSLY is the smaller, earlier-stage experiment. The bigger structural difference is beta: TSLY carries a 1.43 beta versus NVDY's 1.36, signaling that Tesla's underlying volatility makes the covered calls roll more frequently and reset at tighter levels, generating higher premium income but also steeper drawdowns when the stock falls and less participation when it rallies past the call strike.

Who each is best for

NVDY: Fits investors seeking weekly income from a mega-cap tech holding who can tolerate moderate upside caps and are comfortable with a 1.36-beta equity proxy; works for those who want dividend-like cash flow without sacrificing exposure to NVIDIA's core business.

TSLY: Fits investors prioritizing maximum current yield on a higher-volatility name and who accept tighter call strikes and more frequent rebalancing; designed for those willing to trade meaningful upside for a 52.72% distribution rate and who have conviction that Tesla will trade sideways or modestly higher rather than spike sharply.

Key risks to know

• NAV erosion at extreme yield levels: At a 52.72% distribution rate, TSLY's portfolio must sustain call premium generation at levels that historically precede principal decay if the underlying stock underperforms. NVDY at 39.56% faces similar but less acute pressure; both funds are vulnerable to widening bid-ask spreads and option-liquidity gaps if market dislocations occur.

• Call-strike entrapment on sharp rallies: Both funds will underperform their underlying stock materially during multi-week rallies if calls are called away; TSLY's higher beta and tighter strike selection make this more likely and more costly relative to holding the stock outright.

• Single-stock concentration risk: Each fund is a leveraged bet on one company's fortunes. NVDA and TSLA are both mega-cap, but NVIDIA faces semiconductor cyclicality and geopolitical export limits, while Tesla is exposed to EV demand, competition, and regulatory shifts. A 20%+ drawdown in either stock will hit both the equity base and the call premium simultaneously.

• Options-liquidity and rolling risk: NVDA and TSLA options are liquid, but market stress or earnings volatility can widen implied-volatility term structures, reducing premium income available at the target strike in the following week. TSLY's higher distribution means it is more dependent on consistent premium flow.

Bottom line

TSLY offers a higher current yield but locks in that income by accepting tighter caps and a more volatile underlying; NVDY trades yield for a bit more upside participation and lower beta. If you prioritize maximum current yield and can live with call-strike limitations, TSLY's 52.72% rate stands out; if you want a meaningful income stream with less aggressive call selection, NVDY's 39.56% offers a middle ground. Both are single-stock derivatives plays—past performance of either fund does not predict future option premiums or underlying stock returns.