An Easy Way To Double Digit Yields From Mag-7 Stocks

Covered Calls, Dividend Investing, ETFs, Growth Stocks, High-Yield Investments, Magnificent Seven Stocks, Tech
by Tim Plaehn
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The gains from the so-called “Magnificent Seven” stocks powered the 2023–2024 bull market. These mega-cap tech stocks—Tesla, Microsoft, Nvidia, Meta Platforms, Amazon, Alphabet (Google), and Apple—comprise over a third of the cap-weighted stock market indexes.

The only Magnificent Seven tracking ETF, the Roundhill Magnificent Seven Covered Call ETF (MAGY), launched on April 11, 2023, and from that date through the end of 2024, the ETF gained 122%.

Coins in jars with small plants growing out of them.

With the 2025 bear market, the Mag7 stocks lost some of their appeal with investors. At the bottom of the bear market on April 8, MAGS was down 25% year to date. Currently, the ETF is off 3% for 2025.

While gains from these seven stocks have reversed and slowed, the companies remain the engines that drive the economy. These stocks should generate strong long-term returns.

Over the last couple of years, covered call ETFs have launched, giving investors exposure to the underlying assets and dividend income from the option selling strategies. YieldMax launched the YieldMax TSLA Option Income Strategy ETF (TSLY) in November 2022. When I talk to investors at the MoneyShow conferences, I get tons of questions about TSLY and the other YieldMax single-stock covered-call ETFs.

On January 29, 2024, the company launched the YieldMax Magnificent 7 Fund of Option Income ETFs (YMAG). YMAG holds positions in the YieldMax single-stock ETFs covering the Mag7 stocks. With YMAG, you get investment exposure to all seven stocks. Now the fun part. YMAG pays weekly dividends and has a current distribution of 65.6%.

Note: the current yields from these option strategy ETFs vary greatly, and the current distribution is just a snapshot in time. You will earn excellent yields, but the actual returns will be variable.

Last month, on April 23, Roundhill Investments launched its Roundhill Magnificent Seven Covered Call ETF (MAGY). With MAGY, Roundhill is taking a different approach. They will write weekly call options on their own ETF, MAGS. As I write this, MAGY has only paid a couple of dividends, which have been steady at $0.48 per share. The math gives this ETF a current yield of 44%.

With these high-yield ETFs, yield is not everything. I will be tracking comparative total returns as MAGY builds a track record.

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Author: Tim PlaehnTim is the lead investment research analyst for income and dividend investing at Investors Alley. He is the editor for The Dividend Hunter, an investment advisory focused on creating a high-yield income stream and it's companion service The Dividend Hunter Insiders as well as Monthly Dividend Multiplier, a research service focused on dividend stocks using consistent dividend increases to drive capital appreciation. Most recently Tim has been delivering research on high-yield ETFs through his ETF Income Maximizer, ETF Income Edge, and ETF Income Trader research services. Prior to his work with Investors Alley, Tim was a stock broker, a Certified Financial Planner, and F-16 Fighter pilot and instructor with the United States Air Force. During his time in the service he was stationed at various military locations in the U.S., Europe, and Asia. Tim graduated from the United States Air Force Academy with a degree in mathematics. In his free time he tours the United States parks, campgrounds, and wilderness areas in his travel trailer.
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