YMAG vs YMAX: Which Is the Better Pick in 2026?

Overview

Both YMAG and YMAX are YieldMax covered-call ETFs that distribute option premium income weekly. The key difference is scope: YMAG writes calls on the Magnificent 7 tech mega-caps (Apple, Microsoft, Nvidia, Tesla, Alphabet, Amazon, Meta), while YMAX writes calls on a basket of YieldMax's own option-income ETFs across multiple sectors and asset classes. YMAX targets a much higher distribution yield as a result of its broader, more aggressive overlay strategy.

How they differ

YMAX distributes 50.99% annually versus YMAG's 38.29%—a 12.7 percentage-point gap driven by YMAX's exposure to multiple option-income ETFs rather than a single concentrated equity sector. YMAG's beta of 1.16 reflects its Magnificent 7 anchor; YMAX's beta of 1.55 signals meaningfully higher equity market sensitivity, stemming from its diversified underlying ETF basket. Both charge 1.28% in fees and trade at relatively new inception dates (YMAG in late January 2024, YMAX slightly earlier). YMAX is slightly larger by AUM ($420M versus $310M), though both remain modest for covered-call vehicles.

Who each is best for

YMAG: Fits investors who want high option income from a simple, concentrated underlying—the seven largest U.S. tech stocks—and can tolerate concentration risk in exchange for a lower distribution yield and more transparent portfolio mechanics.

YMAX: Fits investors seeking maximum current yield from a diversified basket of option-income strategies and who are comfortable with a fund-of-funds structure and higher market beta to access that distribution rate.

Key risks to know

• NAV erosion at yields above 50%. YMAX's 50.99% distribution rate implies that underlying capital must generate significant total return just to avoid shrinkage. If the basket of underlying YieldMax ETFs underperforms, NAV will decline even as distributions continue, returning capital disguised as yield.

• Concentration in Magnificent 7 for YMAG. All call premium comes from writing options on seven stocks. A sharp decline in tech valuations or a selloff in any of these holdings will compress option implied volatility and reduce future premium collection significantly.

• Fund-of-funds structural drag in YMAX. YMAX holds a basket of YieldMax ETFs, each with its own option overlay and fee layer. The compounded expense ratios and friction between tiers may underperform a single direct covered-call strategy on the same underlying stocks.

• Options expiration and reinvestment timing risk. Weekly distributions tie payouts to option cycle rolls. If volatility spikes or declines sharply between roll dates, the fund may lock in worse premium than it would at a different timing, and the reinvestment of small weekly distributions at variable market levels adds sequence-of-returns drag.

• Beta divergence during equity stress. YMAX's higher beta (1.55 vs. 1.16) means it will decline faster than YMAG in a broad equity selloff. Covered calls provide some downside cushion by reducing exposure, but that protection is incomplete; both funds will experience material losses in a significant drawdown.

Bottom line

If you want a concentrated bet on Magnificent 7 call writing with a lower income payout and simpler mechanics, YMAG offers that directly. If you're chasing the highest achievable yield from a diversified option-income ecosystem and can tolerate higher market sensitivity and fund-of-funds complexity, YMAX delivers that—but at the cost of meaningfully higher NAV erosion risk at a 51% distribution rate. Past performance in a low-volatility equity environment does not predict results when option premiums compress or markets decline.