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The stocks in the Magnificent Seven are known to be powerful performers in the 2020s. However, they offer either a tiny dividend or no dividend at all. What are yield hunters supposed to do, then? The solution may be an exchange traded fund (ETF) called the YieldMax Magnificent 7 Fund of Option Income ETFs (NYSEARCA:YMAG).On the other hand, it’s crucial to know what’s in the YieldMax Magnificent 7 Fund of Option Income ETFs and how it derives passive income for investors. Plus, you’ll definitely want to understand the risks before considering a share position.There’s a little bit of cash and “other” assets as well as a small investment in a government-bond-focused mutual fund called the First American Government Obligations Fund (FAAXX). For the most part, though, the YieldMax Magnificent 7 Fund of Option Income ETFs takes a “fund of funds” approach by investing in seven YieldMax covered call ETFs.The fund’s constituent holdings (NVDY, APLY, MSFO, etc.) use sophisticated options-trading strategies to indirectly derive income from their respective underlying stocks (NVDA, AAPL, MSFT, etc.). These options-trading strategies tend to limit the upside potential of the YieldMax Magnificent 7 Fund of Option Income ETFs’ share price.
