LFGY ETF underperforms amid crypto industry challenges
The YieldMax Crypto Industry & Tech Portfolio Option Income ETF (LFGY) has returned only 13% year-to-date, lagging far behind its underlying crypto-related stocks. This underperformance stems from the ETF's strategy of writing call spreads to generate income. Analysts suggest investors may fare better by purchasing the underlying equities directly.
The LFGY ETF, listed on NYSEARCA, seeks to produce income through options strategies on equities tied to the cryptocurrency and technology sectors. Specifically, it employs call spreads on crypto-related holdings to mimic dividend payouts. However, this approach has led to significant underperformance compared to the assets it tracks.
Year-to-date, LFGY has achieved a modest +13% return, while the portfolio's largest stocks have surged over 50%. The structure fails to efficiently transform capital gains from these equities into reliable dividend-like income. Moreover, during market downturns, LFGY exposes investors to the full extent of downside risk without adequate protection.
Analysts highlight these structural flaws as key reasons for the ETF's struggles in capturing the crypto industry's growth. In a sector known for volatility, the ETF's income-focused tactics have not kept pace with direct equity investments. The article's author discloses no positions in the mentioned companies and emphasizes that past performance does not guarantee future results.
This analysis, published on October 5, 2025, underscores the importance of understanding complex fund mechanisms before investing. For those eyeing crypto exposure, buying individual stocks may offer a more straightforward path to gains.