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

Overview

NVDY and TSLY are nearly identical single-stock covered-call ETFs from YieldMax that sell weekly call options against NVIDIA and Tesla shares, respectively. Both distribute the premium income to shareholders weekly and charge similar expense ratios around 1.08%. The key distinction is their underlying volatility and market behavior: NVDY tracks the more stable AI-chip giant, while TSLY captures Tesla's higher-beta equity swings, which directly affects both the call premiums available and the risk of capped upside.

How they differ

The most obvious difference is volatility. TSLY has a beta of 1.69 versus NVDY's reported 0.0, meaning Tesla's stock swings are 69% more dramatic than the broad market while NVIDIA moves in tighter correlation with its own sector. This translates to richer call premiums for TSLY in volatile environments but also caps upside more aggressively when Tesla rallies—the 52-week high of $49.65 versus current price of $30.29 shows that drawdown risk. NVDY's 52-week range ($12.34 to $18.03) is tighter and its $1.33 billion AUM dwarfs TSLY's $863 million, suggesting more institutional confidence or scale. Both yield around 43–45% annually, but that distribution rate is front-loaded into early years of these strategies; covered-call funds typically see distributions decline as the underlying stock appreciates or volatility contracts. TSLY's 1.07% expense ratio slightly edges NVDY's 1.09%, a negligible difference.

Who each is best for

• NVDY: Investors seeking high current income from a mega-cap tech holding with lower volatility tolerance; suitable for non-registered accounts where weekly distributions can be reinvested without triggering excessive turnover taxes, or for those who view NVIDIA as a long-term AI exposure and don't mind capped upside in exchange for consistent premium collection.

• TSLY: Higher-risk traders comfortable with equity volatility and concentration in a single growth stock; better suited to taxable accounts where the weekly turnover tax drag is acceptable, or tactical investors who want to harvest Tesla's option premiums during periods of elevated implied volatility but expect to exit if the stock rallies sharply.

Key risks to know

• NAV erosion. Both funds yield 43–45% annualized; historical NAV data would clarify whether distributions rely on return-of-capital versus genuine option premium. If premiums alone don't cover distributions, NAV declines over time even if the underlying stock rises.

• Capped upside. Covered calls lock in exit prices on rallies. TSLY's 52-week high of $49.65 versus current price suggests significant opportunity cost if Tesla re-accelerates; NVDY faces similar but less acute cap.

• Volatility compression. If implied volatility in NVIDIA or Tesla options falls—as it often does after sharp rallies or earnings uncertainty fades—call premiums shrink and distributions decline materially.

• Concentration and beta risk. Both are single-stock bets with no diversification. TSLY's beta of 1.69 amplifies drawdowns in market corrections; NVDY's 0.0 beta is unusual and may reflect limited trading data or smoothing, masking real downside in a tech selloff.

Bottom line

If you prioritize income from a lower-volatility mega-cap with institutional scale, NVDY's larger AUM and tighter trading range offer steadier cash flow. If you can tolerate higher equity swings and want maximum call premium capture from Tesla's volatility, TSLY may deliver slightly higher income in volatile markets—but at the cost of sharper drawdowns and more capped upside. Both are tactical income plays, not buy-and-hold core holdings; assume distributions will compress over time and monitor NAV closely to distinguish premium income from capital return. Past performance doesn't predict future results.