MSTY vs NVDY
YieldMax's two most-searched single-stock option-income funds — MSTR vs NVDA — on yield, NAV erosion, risk, and our independent verdicts.
These aren't substitutes: MSTY sells options on MicroStrategy (effectively a leveraged bitcoin proxy), NVDY on NVIDIA. They share a structure that converts extreme single-stock volatility into huge weekly payouts at the cost of principal — both are flagged for NAV erosion, and both fund a large share of their distribution with return of capital. The headline rates (MSTY ~99%, NVDY ~67%) are cash-flow figures, not returns.
On our scoring they're far apart: we rate NVDY WATCH (3.4/5) and MSTY AVOID (2.3/5). MSTY has been the more destructive by a wide margin — roughly -84% total return since inception and a -93% maximum drawdown, versus NVDY's -35% and -60%. If you're considering either, treat it as a speculative, actively-managed position, not an income holding: the distribution has not made holders whole for the capital loss.
“Edge” marks the more favourable fund on that metric only — not an overall recommendation. Returns and rates are period-dependent; both funds may have launched at different times.
The differences that actually matter
1. Different underlyings, same machine
Both are YieldMax single-stock funds that sell call options to turn one volatile stock’s option premium into weekly cash. The difference is what’s underneath: MSTY writes against MicroStrategy (MSTR), which holds ~99% of its assets in bitcoin and trades like a leveraged crypto proxy; NVDY writes against NVIDIA (NVDA), the high-beta AI bellwether. Same structure, very different — and both extreme — sources of volatility.
2. The yield is mostly your own capital
The headline rates are enormous (MSTY ~99%, NVDY ~67%, both weekly), but a large share is return of capital — about 56% for MSTY and 47% for NVDY on a trailing-quarter basis. Both funds carry our NAV-erosion flag. For NVDY, the math is stark: since inception its share price is down about 35% while distributions returned roughly 199% of the original price — i.e. the “income” has substantially been your own capital coming back. Treat the distribution rate as a cash-flow number, never as a return.
3. How much capital each has destroyed
This is the real separator. On a total-return basis MSTY has been catastrophic — roughly -84% since inception with a -93% maximum drawdown — which is why we rate it AVOID (2.3/5). NVDY has been painful but far less so — about -35% since inception and a -60% drawdown — earning a WATCH (3.4/5). Same product family, very different outcomes, driven mostly by how violently each underlying has moved.
4. Risk
Both are single-name, capped-upside, full-downside instruments with negative risk-adjusted returns over the measured period (Sharpe -0.7 for MSTY, -0.21 for NVDY). MSTY is the more extreme on every axis: higher volatility, deeper drawdown, and an underlying whose value is tied to bitcoin. Neither is diversified, and neither’s options overlay protects against a large drop in the underlying.
Which one fits you?
Honestly, neither is an income holding in the buy-and-hold sense — our verdicts (AVOID for MSTY, WATCH for NVDY) say as much. If you choose to own either, treat it as a tactical, speculative position sized accordingly and actively managed, with eyes open that the weekly check is largely your own capital. Of the two, NVDY has been far less destructive; MSTY’s combination of a bitcoin-proxy underlying and a -93% drawdown puts it at the most aggressive end of this entire category.
This is independent research and education, not investment advice or a recommendation to buy or sell any security.
MSTY vs NVDY: FAQ
Is MSTY or NVDY better?
We rate NVDY WATCH (3.4/5) and MSTY AVOID (2.3/5), so by our framework NVDY is the less-bad of the two — it has destroyed far less capital. But neither is a buy-and-hold income fund: both are speculative single-stock option-income bets that cap upside while keeping full downside on a very volatile stock, and both have eroded NAV heavily.
Does MSTY pay a higher dividend than NVDY?
Yes — MSTY's headline distribution rate is around 99% versus NVDY's roughly 67%, both paid weekly. But MSTY's NAV has fallen far more, so the larger rate has not produced a better outcome. A higher distribution rate funded by capital erosion is not a higher return.
How are MSTY and NVDY distributions taxed?
Largely as ordinary income, with a big return-of-capital component (about 56% ROC for MSTY and 47% for NVDY on a trailing-quarter basis). Return of capital isn't taxed when received, but it lowers your cost basis, so it's deferred tax rather than tax-free — and it's the accounting signature of NAV being paid back to you.
Is MSTY riskier than NVDY?
Substantially. MSTY's underlying, MicroStrategy, behaves like a leveraged bitcoin proxy and is far more volatile (about 78% vs NVDY's 43%), and MSTY's maximum drawdown (about -93%) dwarfs NVDY's (about -60%). We rate both High risk and flag both for NAV erosion, but MSTY sits at the extreme end.
Can I hold both MSTY and NVDY?
You can, and you'd diversify the underlying bet (MSTR vs NVDA) — but not the structural problem. Both are single-name, capped-upside, high-ROC funds, so holding both concentrates the same NAV-erosion risk across two very volatile stocks rather than reducing it.
Why is MSTY's NAV declining?
The fund caps its upside (it sells calls) while keeping essentially full downside on an extremely volatile stock, and it pays out far more than it sustainably earns. Those high, mostly-return-of-capital distributions mechanically reduce NAV each week, so MSTR would have to rally well beyond its prior highs just for MSTY to break even — which is why its share price has collapsed since inception even as it paid out.
Want the full picture on each fund — distribution sourcing, the 19a-1 read, NAV-erosion history, holdings and our running commentary?
Open the MSTY report → Open the NVDY report →