My New Favorite Stocks for AI Growth AND Income transcript

The AI boom has created massive wealth in semiconductor stocks, but most income investors have been left watching from the sidelines because you need income today, not when your portfolio is big enough. The good news is you don't have to choose between growing your portfolio and paying your bills anymore. I'm going to reveal four semiconductor ETFs that give your portfolio AI-powered growth while still currently generating the income you need right now.

Understand the problem has been that for decades income investors have faced an impossible choice. You can build your portfolio for income, but you sacrifice growth. Those typical dividend-paying companies are from mature parts of the economy like utilities and consumer staples, slow and stable revenue selling things that we have to buy. For proof, just look at the numbers. The S&P US Dividend Growers Index, which tracks US companies with at least 10 year history of growing their dividend, has returned just 57% over the last 5 years while yielding a 1 and 1/2% dividend, not even enough income to level up into a top ramen noodles.

And now, don't forget 28% of that return has been wiped out due to inflation, meaning investors made just 5.2% annualized real return. Meanwhile, even the overall market, the S&P 500, has returned 80% and both have been left in the dust by 321% surge in the US Semiconductor Index, tracking the performance of those US-listed companies in the semiconductor industry. Income investors didn't just earn less income than they hoped for.

They missed out on what was one of the greatest wealth-building opportunities of a lifetime. But now you don't have to choose anymore. A new approach uses smart option strategies to maximize income through volatility, but also puts you in the middle of the market's biggest growth story. The result, I believe, is a cash flow to pay your bills now, but also grow the potential to keep up with inflation, rising expenses, and pay your bills tomorrow as well.

One of the best funds for that is the YieldMax Semiconductor Portfolio Options Income ETF, ticker CHPY, which invests in 15 to 30 semiconductor companies, then uses an option strategy seeking to generate weekly income distributions while still providing exposure to one of the market's strongest growth themes. That semiconductor theme has been the big winner in the AI boom. While traditional dividend strategies have lagged and produced low single-digit yields, semiconductor stocks have been powered higher by AI, data centers, and cloud computing.

CHPY seeks to tap into that trend while converting some of that industry's volatility into weekly cash flow. The fund holds some of the biggest names in semiconductors, leaders in the theme like Micron Technology, ticker MU, up almost 1,200% over the last 5 years. Marvell Technology, MRVL, up more than 400% and the AI king Nvidia, NVDA, up tenfold over the period. And it's spreading the fund across the industry to give you exposure without the risk in a single stock.

And within each of these, it is buying and selling call options in a call spread strategy to historically generate a 40% annualized distribution rate. Now that weekly distribution is a great feature, though understand that these can fluctuate quite a bit. Now one of the risks I'm going to highlight later. Distributions can rise when volatility and options premiums are higher and then fall when the market conditions become less favorable.

Investing in the fund means you need to accept that fluctuation and just build it into your strategy. For investors seeking that balance between growth and high income though, CHPY can serve as that income-focused anchor to a semiconductor portfolio. Exposure to the biggest growth in the market while prioritizing cash flow to seek to pay those bills now. A great comparison with that income-focused fund is the YieldMax Target 12 Semiconductor Options Income ETF, the ticker SOX Y, which is more growth focused but still targets a 12% income distribution.

That SOX Y also invests in a portfolio of 15 to 30 semiconductor companies and then sells options against those holdings, but instead of trying to maximize those distributions, it's targeting the more modest cash flow to leave more room for growth. Now that makes the SOX Y fit for investors who still need meaningful income, but don't want to give up quite as much of that upside in that semiconductor theme. SCHPY may offer that higher current income potential, but SOXW is built for investors who want the growth engine that keeps on running.

And that said, distributions are still going to fluctuate here as they will with any options-based income strategy. The SOXW pays out on a monthly basis with distributions ranging from $0.65 a share to over a dollar a share per this year. Uh you'll find a lot of the same stocks in these two funds, the leaders in that semiconductor industry, Micron, Marvell, Nvidia, and Arm Holdings, but the difference is in that option strategy and your needs balancing income or growth.

I'll reveal two more income ETFs next that not only creates a higher yields, but also puts you in two of my favorite stocks. But first, I want to thank Yieldmax for helping me work out this idea of balancing between growth and income. Yieldmax isn't chasing meme level income in its ETFs, instead building options income funds seeking to turn volatility into regular periodic income. From the Target 12 ETFs I talked about before on the channel to those semiconductor ETFs, these are real-world solutions to some of investors' biggest problems.

On the site, it's easy to find the perfect ETF to fit your needs from income-focused ETFs with a higher income to the growth and income funds. You'll find some single-stock ETFs that use high volatility stocks like Tesla and Nvidia as reference stocks in an attempt to create high income using options with some put upside potential as well. The fund of fund ETFs seek to give you that exposure across multiples of the Yieldmax option income ETFs, each linked to a share price of the specific company or ETF.

And then the Target 12 and 25 funds, which look to balance that income with growth. Click through and you'll be able to find all the information you want about a fund. Yieldmax is completely transparent, showing you the distributions, return of capital, performance, and exactly what is in every fund. Uh these next two income funds are really exciting because they give you the ability to dial in your portfolio even further, leveraging higher volatility with individual stocks to potentially create more income while also putting you in the companies leading this AI revolution.

It's a great way to fine-tune your portfolio keeping that income cash flow and tilting it in your portfolio to that growth stocks that you believe in most. And first here, you out there in the nation know we got in on shares of Advanced Micro Devices, ticker AMD, early last year before anyone was talking about it. We rode it up to a 273% before cashing it. CEO Lisa Su and the stock aren't done yet though, and a great way to work this into your income portfolio is with the YieldMax AMD Options Income Strategy ETF, the AMDY.

Instead of holding that broader portfolio of semiconductor stocks like we saw with the CHPY or the SOXY, the AMDY focuses exclusively on shares of AMD to to use the higher single stock volatility seeking to generate that higher income yields. It does this through buying call options on the stock while also selling calls and put options to collect premium for cash flow, all while holding cash and the government bonds for more yield.

Now, that concentration creates both the opportunity and the risk here because a single stock is going to be more volatile than a portfolio of 15 or 30 stocks, the options premiums can be much larger translating into that higher distribution income. The trade-off is that we're no longer spreading our money across the entire semiconductor industry, but into just one of the leaders alone. That means for investors that want a higher exposure to AMD, believing it it can continue to take that market share in the AI boom, AMDY could generate more income than the broader fund ETFs along with the higher total return as well.

Now, compared to the CHPY which prioritizes that diversification and income or the SOXY which leans more into growth, the AMDY is a more tactical position great for fine-tuning your portfolio to overweight one of the best stocks in the industry. Now, before highlighting that next ETF, a one producing another double-digit distribution on a stock that has surged more than 10-fold over the last 5 years. Don't want you to think that these income ETFs are without any risk.

There are cons with any investing strategy and and understanding them can can help you get the benefits while minimizing the downside. And first is that while that income is generally very high, it does fluctuate quite a bit with these types of option strategies. For example, the CHPY weekly dividend has been as high as 71 cents a share, but also as low as 38 cents a share this year. And that's because the distributions depend on factors like options premiums, volatility, and market conditions, which are always going to be changing.

And second, this is not guaranteed income. Nobody can guarantee an investment return or a level of income. So, I'd never recommend putting all your money in just a few funds or stocks. So, minimizing these risks or just even accepting them as part of the strategy means diversifying part of your portfolio into other investing ideas. And just being ready for the changes in weekly income. And of course, you can't talk about AI semiconductors without Nvidia.

And here our income growth balance theme with that YieldMax NVDA option income strategy ETF, ticker NVDY. It's built just like the AMD single stock ETF, but here with that trillion-dollar chip leader using call options to get that exposure to Nvidia upside while also selling calls on puts to generate the 47% distribution rate. Now, before clicking over to your portfolio or to check out these funds, the best solution might be piecing them for a complete growth and income portfolio combining the best of each of these ETFs.

For example, a max income investor might put maybe 70% of their money in the something like the CHPY fund along with 15% in NVDY and 15% in AMDY. And that gives you higher income distribution, spreads your money out across the industry, and takes advantage of the potentially higher volatility and income in those single stock funds. Conversely, if you need that income, but you want a little bit more growth for the future, you might position maybe 50% in the SOXL, which seeks to produce that solid 12% income distribution, but keeps a little bit more back for growth, along with investing the other half in those two single stock funds, the NVDA and the AMDY for the for the potential upside in these companies that keep dominating the industry.

Like with anything, the secret is going to be in that balance, not only in the balance between income and growth, like with these semiconductor ETFs, but also having some of your portfolio in other funds and stocks. It helps minimize the risks in any one investing strategy, but still seeking to get you the income you need to pay the bills. Look for that link to YieldMax in the description and check out the funds for this balance between growth and income, along with how YieldMax ETFs might fit in your portfolio.

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