The YieldMax Magnificent 7 Fund of Option Income ETFs (YMAG) bundles seven of YieldMax’s single-stock covered call ETFs (APLY, AMZY, GOOY, MSFO, NVDY, FBY, and TSLY) into one ticker and pays out roughly 43% annually.

The pitch practically writes itself. Seven of the best companies in the market. One income ETF. Weekly distributions. Who wouldn’t want 43% yield on Apple, Amazon, Google, Microsoft, Nvidia, Meta, and Tesla?

Here’s what it doesn’t advertise: nearly 70% of that distribution is your own principal coming back to you. And while YMAG has been distributing roughly half its NAV in cash every year, a plain equal-weight Mag 7 basket has outperformed it by 35 percentage points since January 2024. Despite all that cash hitting your account.

Quick Verdict

Factor	Details
Distribution Rate (June 10, 2026)	43.09% (trailing)
30-Day SEC Yield (June 10, 2026)	60.14%
June 10, 2026 Distribution Breakdown	69.38% return of capital / 30.62% income
Total Return Since Inception (Jan 2024)	~70%
MAGS (equal-weight Mag 7) Same Period	~105%
Underperformance vs. MAGS	~35 percentage points
YTD Total Return (June 10, 2026)	-2.04%
Disclosed Expense Ratio	1.34%
Estimated All-In Cost (with underlying ETF fees)	~2.5–2.7%
Passivity Score	7/10 — easy to hold, but not passive income in any real sense

Best for: Tactical income traders extracting Mag 7 option premium for a defined holding period, with a clear exit

Skip if: You want meaningful participation in the Magnificent 7’s growth while also collecting income — YMAG gives you most of neither

What Is YMAG?

YMAG is a fund-of-funds. It doesn’t hold Apple, Amazon, Google, or any other Magnificent 7 stock directly. It holds seven other ETFs (the YieldMax single-stock covered call funds for each of those companies) and charges a 1.34% management fee on top of whatever those underlying ETFs charge their own investors.

This structure matters for two distinct reasons. First, there’s a fee-on-fee problem covered in detail below. Second: YMAG’s distributions are funded by the distributions flowing out of those seven sub-funds. Every return-of-capital characteristic from each underlying YieldMax ETF passes through into what YMAG distributes to you. When NVDY’s Nvidia-tracking ETF is paying 94% return of capital, that flows into the YMAG distribution you receive.

YMAG launched in January 2024. The premise: take the most popular stocks in the market, bundle their option income strategies together, and pay a blended monthly distribution. Diversification across seven stocks was supposed to smooth income and reduce the single-stock NAV destruction that individual YieldMax funds are prone to.

The total return data since inception shows how that played out.

How Does YMAG’s Double Fee Work?

Each underlying YieldMax ETF carries its own management fee, typically around 0.99–1.09%. YMAG then charges an additional 1.34% on top of the value of those holdings.

You pay twice to own the same seven strategies:

1. Underlying ETF fee (~0.99%–1.09% each): deducted from the NAV of APLY, AMZY, GOOY, MSFO, NVDY, FBY, and TSLY before YMAG even sees the return
2. YMAG wrapper fee (1.34%): charged on YMAG’s total assets, which consist entirely of those same fee-bearing ETFs

All-in, you’re paying roughly 2.5% to 2.7% annually to own a basket of Magnificent 7 covered call strategies. The Roundhill Magnificent Seven ETF (MAGS) — a simple equal-weight Mag 7 fund that holds the actual stocks — charges 0.29%.

MAGS doesn’t pay a 43% yield. But it also doesn’t quietly extract 2.4 extra percentage points per year to deliver similar exposure to the same underlying companies.

The SEC Yield Paradox

Something unusual stands out in YMAG’s yield data: its 30-day SEC yield of 60.14% is higher than its trailing distribution rate of 43.09%.

Normally that relationship is inverted. A fund’s trailing yield reflects what it actually paid over the prior 12 months. The SEC yield is a standardized forward-looking estimate of net investment income after expenses. When SEC yield exceeds trailing yield, it usually signals the fund is positioned to pay more than its recent history.

For YMAG, the explanation is structural. The SEC yield calculation captures the underlying YieldMax ETF distributions flowing into YMAG as taxable investment income at the fund level. Those distributions carry all the return-of-capital characteristics of the underlying funds — but YMAG records them as income for SEC yield purposes.

The result: a headline number that overstates what most investors would consider actual investment income. The 43.09% trailing rate is already largely principal return. The 60.14% SEC yield is measuring something that includes even more of it.

The June 10, 2026 Distribution: 30 Cents Real, 70 Cents Yours

On June 10, 2026, YMAG published its distribution breakdown: 69.38% return of capital, 30.62% actual investment income.

That’s better than where some individual YieldMax funds landed in April 2026 — MSTY came in at 98% ROC, NVDY at 94% — but it still means roughly 70 cents of every distribution dollar is your own money leaving the fund.

On a $10,000 YMAG position:

• Your distribution looks like ~$358/month at a 43% annual yield
• About $248 of that is your own principal being returned
• About $110 is actual income generated by the option strategies

The NAV declines by the full $358 on ex-dividend date. Your brokerage account records income. Your net position is smaller.

At 69.38% ROC, reinvesting YMAG distributions to compound income doesn’t compound income. It compounds the purchase of a declining asset with your own returning principal. The math doesn’t improve with time.

The Total Return Gap: 35 Points in 18 Months

This is the number that matters.

Since YMAG’s January 2024 inception, the fund has returned approximately 70% total, combining all distributions paid and the change in NAV. Over the same period, MAGS — an equal-weight basket of the same seven stocks with no options overlay — returned approximately 105%.

That’s a 35-percentage-point gap in roughly 18 months.

Fund	Total Return Since Jan 2024	Strategy	Expense Ratio
YMAG	~70%	Fund-of-funds, Mag 7 YieldMax ETFs	~1.34% + underlying (~2.5–2.7% all-in)
MAGS	~105%	Equal-weight Mag 7 basket	0.29%
Gap	~35 percentage points	—	—

YMAG paid out approximately half its NAV in distributions over that period. You collected that cash. And you still trail a buy-and-hold investor who did nothing except own the same seven companies.

YTD daily total return as of June 10, 2026 is -2.04% — while the Magnificent 7 stocks have broadly recovered in 2026. The equal-weight basket participated in that recovery. YMAG’s covered call structure capped the upside from it.

What Holding the Actual Stocks Gets You

The covered call overlay in each underlying YieldMax ETF works by selling the right to buy the stock above a certain price. You collect premium now; you give up gains above the strike.

In a flat or down market, this trade has merit. In a market where Nvidia keeps making new highs, Apple is at record levels, and the Magnificent 7 is doing what it’s been doing for most of the last three years — capping that upside is expensive. Every time NVDY caps Nvidia’s gains to extract weekly premium, it misses a piece of the rally. Multiply across all seven stocks for 18 months.

JEPI faces the same structural problem on the S&P 500 — it underperformed by 13–15 percentage points in 2024’s bull market. YMAG applies the same mechanism to the highest-growth stocks in the market, with more aggressive option writing to hit the 43% distribution target. The upside sacrifice is larger because the distribution target is higher.

The underlying companies — Apple, Amazon, Google, Microsoft, Nvidia, Meta, Tesla — generate returns by being excellent businesses over time. The option overlay converts some of that growth into current income. At YMAG’s distribution rate, it converts a lot. And then 70% of what it converts turns out to be your own principal handed back to you.

The Tax Situation Adds a Third Problem

Return-of-capital distributions reduce your cost basis. They’re not taxed when received — but when you eventually sell, you owe capital gains on the difference between sale price and your adjusted cost basis.

Hold YMAG for several years at 69.38% ROC per distribution, and your cost basis erodes systematically. You may end up with taxable gains at exit even if the position underperformed on a total-return basis. A declining NAV plus an eroded cost basis is not a rare edge case for a fund paying 43% annually — it’s the predictable arithmetic outcome.

ULTY, which faces similar dynamics through a different structural route, has demonstrated where this leads: 84% NAV erosion from IPO, a 1-for-10 reverse split, and investors holding positions worth a fraction of their original investment with cost bases that have been continuously adjusted down by ROC distributions. YMAG’s underlying seven stocks are far more stable than ULTY’s high-volatility basket, but the ROC mechanics work the same way.

Who This Works For

Premium extraction traders. Buy YMAG to harvest option premiums embedded in the distributions, hold for a few months, exit when implied volatility compresses across the Mag 7. The structure can work with a defined entry and exit. You need to understand you’re speculating on aggregate implied volatility across seven option chains, not investing in the Magnificent 7.

Tax-deferred income accounts with eyes open. In a Roth IRA, YMAG’s ordinary income tax disadvantage disappears and the ROC cost-basis issue is moot. If you genuinely need current income from a retirement account and accept the total-return trade-off explicitly, YMAG is cleaner in a tax-exempt wrapper than in a taxable account.

That’s a short list. The marketing reaches a much larger one.

Who Should Skip It

Anyone with a multi-year time horizon wanting Magnificent 7 exposure. The 35-point underperformance versus MAGS since inception isn’t a temporary lag — it’s what happens when you systematically sell the upside of the fastest-growing stocks in the market. That compounds against you over time.

Income investors expecting stable cash flow. At 69.38% ROC, the income isn’t stable — it shifts with option volatility and the underlying ETFs’ remaining NAV. As those NAVs erode, the absolute dollar amount the strategy can generate shrinks correspondingly. Smaller pool to write options against means smaller premiums, means larger ROC share per distribution.

Anyone comparing YMAG’s yield to real dividends. A 43% “yield” that’s 69% return of capital is not comparable to a 3.5% SCHD yield or a 10% BDC yield. Those are income from underlying businesses. YMAG’s 43% is mostly a principal drawdown schedule with a yield label.

The Bottom Line

YMAG is a well-constructed product that does exactly what its structure allows: pay out a large monthly number using option premiums and investor principal, layered across a fund-of-funds that charges fees twice on the same seven stocks.

The 43.09% distribution rate looks compelling. The 69.38% return-of-capital component reveals most of it. The 35-point total return gap versus a simple Mag 7 basket shows the compounded cost.

For the Magnificent 7 specifically — companies whose entire value proposition is long-term growth at scale — the covered call overlay that generates YMAG’s income is particularly punishing. You’re paying double fees to own a strategy that systematically sells the upside on the best growth stocks in the world, then returns most of what it generates as your own principal.

The underlying seven companies are excellent. The wrapper around them isn’t the way to own them.

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Distribution data sourced from the YieldMax YMAG fund page. Total return comparisons based on published fund performance data through June 10, 2026. This is not financial or investment advice. Verify current yields, distribution breakdowns, and expense structures before investing.