BIGY vs MSTY: Diversified YieldMax Fund Targets 12% Without Single-Stock Risk

Comparing Two YieldMax Strategies

The YieldMax MSTR Option Income Strategy ETF (MSTY) has experienced significant declines, with its share price falling 68.38% over the past year to $12.61. Its weekly distribution has dropped from a historical $4.42 to $0.22, reflecting the underlying MicroStrategy's sharp downturn. In contrast, the YieldMax Target 12 Big 50 Option Income ETF (BIGY) applies a similar covered-call strategy but across 50 large U.S. companies, aiming for a 12% annual income target.

BIGY's diversified approach has yielded different results. Since December 31, 2025, BIGY's price is up 7.44%, and over one year it has gained 18.04%. Monthly distributions have ranged from $0.49 to $0.54, with trailing 12-month distributions totaling $6.511427 and forward annualized income of $6.2844. The fund's current yield is near 11.99%, with an expense ratio of 0.99%, slightly lower than MSTY's 1.03%.

Diversification and Performance

BIGY's top holdings include NVIDIA at 6.33%, Apple at 6.15%, Alphabet at 5.63%, and Amazon at 5.47%. This diversification reduces the impact of any single stock's decline. For instance, NVIDIA reported Q1 FY2027 revenue of $81.615 billion, up 85.23% year over year, including $75.246 billion in data center revenue. High implied volatility in mega-cap stocks like NVIDIA and Apple generates call premium without relying on dividends.

Since its inception, BIGY has outperformed JEPI and SPYI on cumulative total returns, according to coverage from its one-year anniversary. However, the covered-call strategy caps upside when stocks rally strongly. For example, Alphabet is up 14.44% and Amazon up 17.95% year-to-date, but BIGY holders capture only a fraction of those gains.

Risks and Considerations

BIGY is not without risks. Distributions are variable and taxed largely as ordinary income. The fund's assets are modest at $26.1 million, which could lead to wider bid-ask spreads. A broad market downturn would affect all 50 holdings simultaneously, though none are as volatile as MicroStrategy.

For investors considering a switch from MSTY to BIGY, tax implications may apply. Selling MSTY at a loss could generate capital losses to offset gains, and wash-sale rules would not apply due to different underlying holdings. In an IRA, the switch is simpler. Position sizing remains crucial, as option-income ETFs are yield sleeves that can still lose principal in adverse markets.

What it means for income investors

BIGY offers a diversified alternative to single-stock option-income funds, targeting a similar yield with reduced concentration risk. Its performance since inception suggests that a basket approach can deliver consistent income while mitigating the blow-up risk seen in MSTY.

Reporting based on: Yahoo Finance. Figures verified against market data where available.