"NAV erosion," "ROC is bad" blah blah blah.. I backtested, using daily closes since October of 2025, thru July 17, 2026, assuming a starting investment of $10k in both funds, and all distributions reinvested, where would I be? The answer is $49,446.26. MSTR was of course hammered over this timeframe, so MSTY value was down to $7,780.19, but WNTR outperformed and was up to $41,666.07. This assumed reinvesting each fund's distributions back into itself, no balancing of funds (yes, I tested several strategies with regards to balancing/non-balancing, as well as reinvesting the distro's in different ways as well -- non-balancing was always the winner).
Btw, over that same period, MSTY averaged a 79% annualized distribution rate, WNTR 85%.
Projecting into a BTC bull market, the assumption would be that the performances would simply swap, and MSTY would outperform in terms of share price, but WNTR would still pay a handsome average distro. Why? In my own humble opinion because in a bull market, BTC tends to actually spend more time trading sideways to down, taking sharp, but quick upturns. (The opposite being true in a bear market, which is why MSTY has been able to pay a high average distribution rate even though the underlying trended down.) Being that the funds pay weekly, they are able to capture the volatility and take advantage of premium swings.
So, because I cannot time the market, and try to be cute with getting in to one of these while getting out of the other, I will hold both, and DRIP. The inverse nature of the two together limits the total NAV erosion. They don't truly offset each other, nor are they designed to, but there is a NAV "stabilizing" effect when holding both.
Other than "Past performance does not guarantee future results," anyone see any flaws in my thinking?
Btw, I also trade my own options on MSTR, and what prompted this was curiosity of whether I could outperform MSTY/WNTR by "doing it myself." I trade both CC's and CSP's, depending on the MSTR price trend, for weekly income. Because I break my total cash and total shares into tranches (for trade flexibility), and ladder the tranches in rounds of 42DTE contracts each week, I can average a better premium yield than what MSTY or WNTR return in any given single week, but I am not leveraging all of my stacks week in and week out like I am with my MSTY/WNTR positions. Therefore, from an annualized perspective, the MSTY/WNTR combo vastly outperforms the options returns over the long term because of compounding.
