MSTY dividend yield: why the page prints 100% and under 2%

Two yields on one page

Search “msty dividend yield” and the answer depends on which number on the fund’s own page gets read. At the top of MSTY’s page sit two figures side by side. A distribution rate of 100.15% and a 30-day SEC yield of 1.74%, both dated August 26, 2026 [1]. Lower down, the fund facts block repeats the 1.74% SEC yield as of August 31, 2026, beside a NAV of $15.35 [1].

Both numbers are the fund’s. Neither is a typo. They measure two different things, and the page says what each one is in its own footnotes.

I read those footnotes the way I read any receipt. What does each number claim to measure, and what does it leave out?

What the distribution rate measures

The footnote under the big number is plain. The distribution rate is the annual rate an investor would receive if the most recently declared distribution stayed the same going forward [1]. It is calculated by annualizing the fund’s most recent distribution and dividing the result by the fund’s most recent NAV [1].

So the input is one payment. MSTY pays weekly, and the most recent distribution on August 26, 2026 was $0.2836 per share [1]. Annualizing a weekly payment means treating that one week as if it repeats fifty-two times. Divide the total by the NAV and the page prints a rate of 100.15%.

The same footnote says what the number is not. The distribution rate represents a single distribution from the ETF and does not represent its total return [1]. The page adds that distributions are not guaranteed and that the rate will change over time, and the change may be significant [1]. That is the fund telling the reader the number is a snapshot of one week, scaled up.

One more line sits in that footnote. The distribution rate includes option income [1]. That phrase is the whole difference between the two numbers.

What the 30-day SEC yield measures

The second footnote defines the smaller number. The 30-day SEC yield represents net investment income earned by the fund over the 30-day period ended at the most recent month end, expressed as an annual percentage rate based on the fund’s share price at the end of that period [1]. The fund facts block adds that it is calculated with a standardized formula mandated by the SEC [1].

Then the words that matter. The SEC yield excludes option income [1]. It is the fund’s net investment income only, which for MSTY is mostly interest.

The prospectus explains where that interest comes from. The strategy has three elements: synthetic long exposure to MSTR, call writing against it, and US Treasuries, which are used as collateral for the options and which generate income [2]. The Treasuries are the part the SEC yield sees, and the option premium the fund exists to harvest is not counted in it. Fees come out too, and the gross expense ratio on the page is 1.03% [1].

Why they differ by so much

The two numbers are more than fifty times apart, and the gap is not an error. It is two definitions that count different cash.

The distribution rate starts from the whole payment, option premium included, and annualizes one week of it. The SEC yield starts from net investment income only, option premium excluded, over a month. One is what the fund paid out last week, scaled. The other is what the fund earned as income last month, under a formula the SEC wrote so that every fund reports it the same way.

For MSTY, that makes the SEC yield closer to a bond fund’s number, because the income it counts is Treasury interest less fees. The distribution rate is the number that gets quoted, and it is the one that carries the option premium. Neither is a forecast. The page says so twice: future distributions may differ significantly from either figure [1].

Where the payment comes from

So the payment is mostly not income, at least not in the SEC sense. What is it?

The page answers that too, beside the same payment. The distribution on August 26, 2026 contained an estimated 98.54% return of capital and 1.46% income [1]. Return of capital is not earnings. Under the tax rules, the payer reports it in box 3 of Form 1099-DIV as a nondividend distribution, if determinable [3].

The prospectus names the consequence for the share price. When the fund makes a distribution, its NAV will typically drop by the amount of the distribution on the ex-dividend date, and repeated distributions may significantly erode NAV over time [2]. A payment that is mostly return of capital is, in plain words, the fund handing back part of the share’s value each week. The distribution rate counts all of it as yield, and the SEC yield counts none of it.

That estimate is a book figure, not the tax character, and it moves. The MSTY distributions guide walks the estimate, the audited tax character, and what reaches the 1099-DIV. The ETF income calculator runs a position through the arithmetic with a return-of-capital share the reader sets.

The receipt

What MSTY’s page prints: a distribution rate of 100.15%, one week’s payment annualized over NAV, option premium included. A 30-day SEC yield of 1.74%, net investment income only, option premium excluded, on a standardized formula. Both as of the dates the page states, both labelled not indicative of future distributions [1].

A search for the dividend yield gets one of those two numbers, and the honest answer is that the fund reports both and defines both. The big one is a snapshot of a payment that was itself mostly return of capital. The small one is the income. Which number a reader wants depends on the question, and neither one is the total return.