Summary
- Roundhill HOOD WeeklyPay ETF offers a high yield, but most distributions are return of capital, not genuine income.
- HOOW’s leveraged, weekly-reset structure amplifies both gains and losses, making it a tactical, not buy-and-hold, investment.
- The high yield is misleading, as weekly payouts erode the fund’s NAV, and total return often lags HOOD, even in strong years.
- HOOW suits only short-term, high-conviction bullish bets on HOOD; for most investors, direct HOOD ownership is preferable.
Richard Drury/DigitalVision via Getty Images
Roundhill HOOD WeeklyPay ETF (HOOW) looks tempting given its high yield (37% TTM...
Summary
- Roundhill HOOD WeeklyPay ETF offers a high yield, but most distributions are return of capital, not genuine income.
- HOOW’s leveraged, weekly-reset structure amplifies both gains and losses, making it a tactical, not buy-and-hold, investment.
- The high yield is misleading, as weekly payouts erode the fund’s NAV, and total return often lags HOOD, even in strong years.
- HOOW suits only short-term, high-conviction bullish bets on HOOD; for most investors, direct HOOD ownership is preferable.
Richard Drury/DigitalVision via Getty Images
Roundhill HOOD WeeklyPay ETF (HOOW) looks tempting given its high yield (37% TTM), but we have to understand that most of this is Return of Capital, not real income. Its leveraged, weekly resetting structure also makes it a tactical
This article was written by
51 Followers
**Analyst’s Disclosure:**I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.