Stock Analysis
General
Library
Yield max ETFs are officially bringing their high-income strategies across the pond through HANetf launching new European versions of their popular U.S. funds.
The idea sounds incredible: access to U.S.-style income products, massive yields, and monthly payouts right here in Europe.
But there’s one major catch that most people won’t notice until it’s too late… the 30% U.S. withholding tax (on some products not all)
Let’s break it all down 
WHAT YIELDMAX IS DOING
YieldMax has dominated attention in the U.S. for its high-income covered-call ETFs. Funds that generate big monthly distributions by selling options on major stocks and ETFs.
Now they’re teaming up with HanETF to bring those same strategies to Europe. The two funds most recent announced:
• An income-maximised fund (based on their ULTY model) which is a direct wrapper of the U.S. version. • A new defence-sector income fund (NATY) designed to sell covered calls on top defence names and generate monthly cash flow.
Both are expected to pay monthly distributions, one is a UCITS wrapper, other is non-UCITS... meaning they don’t follow the usual European fund rules if outside a UCITS.
So far, so good... until you dig into the tax side.
THE HIDDEN PROBLEM: WITHHOLDING TAX
When you invest in a U.S.-domiciled fund, the U.S. government automatically takes a slice of the income before it ever reaches you. This is called withholding tax (WHT).
• The default rate is 30%, applied to most foreign investors. • Certain countries have tax treaties with the U.S. that reduce it (usually to 15%) but only if your broker or platform files the right paperwork (like a W-8BEN).
Since some of the new YieldMax funds for Europe will be direct wrappers of the U.S. funds - not separate UCITS structures, that same U.S. withholding tax applies.
Every time the fund distributes income from U.S. option premiums or dividends, up to 30% could be taken off the top.
WHY THIS MATTERS
Let’s say the headline yield is 30% (based on their option strategy).
If you lose 30% in withholding tax, your real yield instantly drops to around 21% and that’s before you pay your own country’s tax on top.
That “85% of call premium distributed” figure might look incredible on paper… but in practice, a big chunk could vanish to Uncle Sam before it ever hits your account.
Even worse, that drag reduces how much income can be reinvested which speeds up NAV decay and weakens the fund over time.
APPROXIMATE WITHHOLDING TAX RATES FOR COMMON EUROPEAN INVESTORS
Country Typical U.S. Withholding Tax
United Kingdom 30% default
Germany 30% default
France 30% default
Ireland 30% default
Spain 30% default
Italy 30% default
Netherlands 30% default
All while on top of that, there is local tax to be added. for example the full rate of Germany would be 57% for an average investor. That’s a huge leak in yield especially for high-distribution products.
THE REAL-WORLD IMPACT
Example on a 30% headline yield:
• Gross yield (advertised): 30.0% • Minus 30% U.S. WHT: 21.0% • Minus 20% domestic income tax (average): around 16.8% net to investor
So while the product looks like a 30% monster yield, after tax drag and compounding effects you might only see half that.
And since most of that income comes from option premiums, not dividends, your tax treatment may vary... some brokers even categorise it as miscellaneous income, which complicates things further.
STRUCTURAL RISKS BEYOND TAX
Being non-UCITS adds another layer:
• Less regulatory protection (no EU diversification standards)
• Currency risk - denominated and taxed in USD
• Transparency risk - less frequent reporting
• NAV erosion - high distributions mean faster drawdown in recovery phases
Experienced investors can manage that risk but new investors need to know exactly what they’re buying.
YieldMax’s expansion into Europe is exciting - it proves that the high-yield, options-based model is gaining traction globally.
But European investors must look past the shiny yield and do the math on tax and structure.
Without proper filing or structure, 30% of your income disappears instantly. That means the advertised yield could be cut nearly in half. And because these are non-UCITS wrappers, you’re taking extra risk for that yield.
While the marketing says “monthly income,” the fine print says “after-tax reality check.”
If YieldMax wants these products to truly succeed in Europe, they’ll need to adapt either by using a UCITS-friendly structure or finding a way to reduce that tax drag (which they have done with some funds already)
Until then, treat them as high-yield, high-risk, and high-tax products... Price them accordingly in your portfolio.
It’s not about chasing the biggest yield... it’s about keeping the most after tax. The snowball only grows if it isn’t melting on the way down the hill.
