The Hidden Tax in NVDY ETF: A $1,000 Cost on Every $10,000 Invested

YieldMax NVDA Option Income Strategy ETF (NYSEARCA:NVDY), marketed as a high-yield vehicle for NVIDIA (NASDAQ:NVDA) investors, is quietly eroding returns on two fronts: exorbitant fees and a covered call strategy that transfers the stock’s biggest gains to option buyers. With a 1.09% annual expense ratio—nine times that of a typical index fund—and only 11.5% of assets in actual NVIDIA shares, the fund’s structure raises questions about its ability to deliver long-term value.

Fee Structure and Hidden Cost

■Annual expense ratio: 1.09% (nine times higher than standard index funds).

■Cost on $10,000 investment: ~$109 annually.

■10-year impact: Compared to low-cost alternatives, the fee alone could cost investors over $1,000 in lost value.

Performance Comparison

■NVIDIA stock: Up 28.72% annually and 13.25% YTD.

■NVDY performance: 27.94% annually and 11.38% YTD.

■Gap: NVIDIA’s 1.87% YTD outperformance reflects the capped upside of the covered call overlay.

Fund Composition

■NVIDIA equity as of May 19, 2026: Only 11.5% of net assets.

■U.S. Treasuries: 20.6%.

■N-PORT data (April 30, 2026): ~94.9% in cash/T-bills, with NVIDIA exposure via offsetting options.

■Asset types: Primarily cash and short-term Treasuries, not direct equity ownership.

Bora Yalın Analysis: NVDY’s high fees and covered call structure create misaligned incentives for investors chasing NVIDIA’s momentum. Direct equity ownership may prove more advantageous in volatile growth stocks. Its cash-heavy model also introduces sensitivity to liquidity shifts and Fed policy moves, potentially limiting appeal in risk-on environments.