1 hour ago
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Austin Smith
Thu, March 19, 2026 astatine 8:35 AM CDT 4 min read
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YieldMax DDDD ETF (DDDD), launched March 11, 2026, holds Schwab US Dividend Equity ETF (SCHD) and writes covered telephone spreads to people astir treble SCHD’s 3.39% yield; large underlying holdings see Verizon (VZ) astatine 4.49% of SCHD with $19.8B escaped currency travel successful FY2024 and a 20+ twelvemonth dividend maturation streak, and Altria (MO) astatine 4.14% of SCHD yielding 6.16% with 60 dividend increases successful 56 years contempt declining volume.
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DDDD’s doubled income comes from selling upside done options overlays, capping appreciation and creating taxation inefficiency from short-term gains portion the brand-new $2.3M money carries NAV erosion hazard if distributions transcend earnings.
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YieldMax DDDD ETF (NYSEARCA:DDDD), launched connected March 11, 2026, owns SCHD and writes options connected its holdings to treble the yield. If you already clasp Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD), which presently yields 3.39%, DDDD targets astir treble that output done an actively managed options overlay, putting the organisation people adjacent treble that output annually. But earlier chasing that income, recognize what is really generating it.
DDDD's largest equity holding is SCHD itself astatine 19.04% of nett assets, giving it nonstop vulnerability to SCHD's apical dividend payers. Two of the astir meaningful underlying positions are Verizon Communications (NYSE:VZ) astatine 4.49% of SCHD and Altria Group (NYSE:MO) astatine 4.14%. Both correspond immoderate of the highest-yielding positions successful the portfolio.
Verizon has raised its dividend for implicit 20 consecutive years. Free currency travel came successful astatine $19.8 cardinal successful FY2024, against operating currency travel of $36.9 cardinal which provides beardown dividend coverage. The annualized dividend of $2.735 annualized dividend compares to TTM EPS of $4.06.
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Most Americans drastically underestimate however overmuch they request to discontinue and overestimate however prepared they are. But information shows that people with 1 habit person much than treble the savings of those who don’t.
The hazard is the equilibrium sheet. Total indebtedness stands astatine astir $144 billion, with shareholders equity of $100.575 billion. This is simply a telecom reality, not an anomaly, but it limits flexibility. Verizon's 2025 guidance calls for escaped currency travel of $17.5 cardinal to $18.5 billion, inactive comfortably supra the dividend obligation.
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