Exchange-traded funds (ETFs) offer investors access to different strategies, sectors, and asset classes, whether they be passive index investing or more complicated options strategies like those offered by YieldMax ETFs. Two of YieldMax’s popular ETFs, YieldMax COIN Option Income Strategy ETF (CONY) and YieldMax MSTR Option Income Strategy ETF (MSTY), provide investors exposure to options strategies tied to stocks in the cryptocurrency space, Coinbase (COIN) and Strategy (MSTR).
This article will compare the holdings, performance, risk implications, and pros and cons of both CONY and MSTY, helping investors to determine if these ETFs are right for their portfolio.
Why Invest In YieldMax Funds?
Investors should consider investing in YieldMax funds like CONY and MSTY if they’d like the opportunity to earn more dividend yield through options-based strategies. Investors in YieldMax ETFs can earn regular income, risk-adjusted returns and exposure to an asset category like cryptocurrency or without direct stock or asset ownership.
YieldMax ETFs can come with downsides like limited returns, market volatility and high expense ratios compared with direct stock ownership. These ETFs can also lead to higher tax burdens due to high dividend yields, so investors should research these funds and evaluate if the fund strategies are right for their investment strategy and financial situation.
Understanding The Basics Of CONY And MSTY
Below are the basics of both CONY and MSTY, similar income-focused focused ETFs offered by YieldMax which utilize options strategies to deliver attractive income generation and exposure to volatile stocks and sectors with capped gains.
What Is CONY?
CONY is an income-focused ETF offered by YieldMax which utilizes a synthetic covered call or covered call spread strategy for Coinbase Global, Inc. (COIN). Through call options, CONY generates premium income which can lead to an attractive dividend yield for investors.
This ETF is focused on income generation for investors as well as indirect exposure to the stock price of COIN while restricting potential stock gains in favor of yield. This ETF is ideal for income-focused investors but investors interested in growth should consider investing in COIN itself.
What Is MSTY?
MSTY is an income-focused ETF also offered by YieldMax which utilizes a synthetic covered call or covered call spread strategy for Strategy (formerly MicroStrategy). This ETF aims to deliver a high dividend yield while providing exposure to investors to Strategy with less volatility than direct stock ownership. Like CONY, MSTY offers higher income generation with restriction of capital appreciation.
Key Differences Between CONY And MSTY
Historical Performance Comparison
CONY has experienced a negative return of -15.52% over the past year, based on Coinbase’s difficulties with regulators and industry volatility. In contrast, MSTY returned 62.68% while offering a lower dividend yield of 158% compared with CONY’s 185% yield. MSTY’s exposure to Strategy which is tied to Bitcoin which experienced strong performance in 2024 affected the ETF’s performance.
MSTY has shown strong momentum based on speculative trends for Bitcoin and Strategy in turn while CONY has lagged in returns like Coinbase.
Comparing CONY And MSTY Holdings
CONY holds option contracts based on Coinbase while MSTY holds options contracts based on Strategy performance. Both ETFs use synthetic cover call strategies but differ in their exposure to the two stocks. Investors should weigh the differences in performance of Coinbase and Strategy, historical ETF performance and yield, and market trends before investing in either CONY or MSTY.
Investors should also consider other ETFs with differing strategies for their portfolios including the best ETFs of 2025, according to Forbes.
CONY Vs. MSTY Dividend Yields
Of late, CONY has delivered a higher dividend yield of 185% through income generated from call option premiums tied to Coinbase’s stock. MSTY also delivered a strong dividend yield of 158% as well as an impressive 1-year return of 63% based on Strategy’s price movements and connected Bitcoin volatility. Investors seeking income may prefer CONY based on historical dividend yield and MSTY for a mix of yield and growth, factoring in the inevitable volatility of both Strategy and Bitcoin.
Market Sentiment And Trends
Market sentiment towards CONY has been cautious as Coinbase has experienced regulatory scrutiny (although the SEC recently dropped a lawsuit against them), as well as fluctuations in the cryptocurrency market. CONY experienced a negative 1-year return while delivering an impressive high dividend yield. Conversely, MSTY has experienced positive momentum with a high 1-year return, based on Strategy’s Bitcoin speculation-driven high returns.
If Bitcoin and Strategy in turn continue experiencing strong growth performance, MSTY may deliver an impressive dividend yield as well as strong returns for investors.
CONY And MSTY Risk Considerations
Both CONY and MSTY bear risks tied to the exposure to the individual stocks the strategies are based on as well as underlying risks connected to the options strategies employed by YieldMax. CONY bears risks tied to Coinbase’s volatility due to regulatory scrutiny as well as cryptocurrency exposure. MSTY also bears risk due to Strategy’s exposure to Bitcoin and the speculative nature of the stock’s trading multiple.
CONY and MSTY also bear risk like capped gains and fluctuations in the derivative market. Investors tolerant to risk and motivated by performance should consider these best stocks for 2025, according to Forbes.
Tax Implications
CONY and MSTY both generate taxable income through options premiums which are typically treated as short-term capital gains. Before investing in either fund, investors should consult a tax expert to understand how distributions from the ETFs should affect their tax burdens. Investors should also evaluate the ideal account to hold these ETFs for their financial goals and tax situation like a taxable, traditional IRA or Roth IRA.
CONY vs. MSTY: Pros And Cons
CONY and MSTY are both attractive ETFs for income-motivated investors but each have pros and cons tied to stronger returns vs dividend yields, volatility, and sector exposure.
CONY Pros
- Higher Dividend Yield: CONY offers a higher dividend yield of 185%.
- Stable Income Strategy: CONY offers a stable income strategy which can be ideal for risk-averse investors.
- Cryptocurrency Exposure: Investors can gain exposure to cryptocurrency without direct ownership.
CONY Cons
- Lower Return: CONY had a negative return of -15.52% compared to MSTY’s high positive return.
- Exposure to Coinbase Volatility: COIN has historically been a volatile stock with lower returns than MSTR.
- No Direct Ownership: While this can be a pro as well, investors will have capped returns.
MSTY Pros
- Strong Returns: MSTY outperformed CONY with a 63% 1-year return.
- High Dividend Yield: In addition to a strong return, MSTY offered a 158% yield.
- Growth Tied to Bitcoin: Despite volatility, Bitcoin has had strong performance compared to the market average.
MSTY Cons
- High Volatility: Bitcoin’s price swings do lead to high Strategy and MSTR volatility.
- Lower Yield: MSTY has a lower dividend yield compared with CONY.
- Limited Capital Appreciation: Investors have capped returns compared to direct MSTR ownership.
Investor Suitability
CONY is well suited to investors focused more on stability and consistent yield payments, as well as investors who would like exposure to Coinbase without owning the stock directly. MSTY is more suitable for investors who want higher yield through options premiums as well as potential growth from MSTY’s connection to bitcoin-linked volatility. As mentioned, CONY has experienced volatility as well due to Coinbase’s regulatory issues connected to cryptocurrency offerings.
Ultimately, investors should decide if an options fund strategy is right for them in the first place and also weigh their risk tolerance, prioritization of growth, individual tax situation and income needs before choosing one of these ETFs for their portfolio.
Bottom Line
CONY and MSTY offer income generation through option-based strategies tied to stocks in the cryptocurrency space. These ETFs differ in the stocks they’re tied to and their associated performance and volatility, as well as the ensuing returns and dividend yields each ETF delivers to investors. CONY delivers a higher dividend yield and worse performance while MSTY delivers slightly lower income but greater returns tied to the strong performance of Bitcoin and Strategy.
Understanding the underlying options strategies of both ETFs, the outlook for the associated stocks and how each ETF will operate in your portfolio and investment strategy will help you determine if CONY or MSTY is right for you.
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