Dividend Yield as a Basis for Investment Decision Making with Dollar Cost Averaging Policy as a Moderating Variable: Exchange Traded Fund (ETF) Yieldmax Period April 2024 – April 2025

Abstract

This study examines the investment behavior of YieldMax Exchange Traded Funds (ETFs), which are financial instruments based on a synthetic covered call strategy offering high dividend yields, while also carrying substantial risks of Net Asset Value erosion and price depreciation. The main issue addressed in this study is whether high dividend yield is actually capable of improving investment performance, and whether the Dollar Cost Averaging (DCA) policy is able to moderate such relationship. Therefore, this study aims to analyze the effect of Dividend Yield on Investment Performance, measured by Holding Period Return (HPR), and to test the role of DCA as a moderating variable in YieldMax ETFs during the period of April 2024 to April 2025. This research employs a quantitative approach using back-testing simulation and panel data analysis. The sample consists of 14 YieldMax ETFs observed under two investment strategy scenarios, namely Lump-Sum Investing (LSI) and Dollar Cost Averaging (DCA), resulting in 364 balanced panel observations. The data were processed using EViews 12 with Moderated Regression Analysis (MRA). Panel model selection was conducted through the estimation of Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM). Since FEM could not be estimated stably, the final model was determined using the Lagrange Multiplier Test, which indicated that the Random Effect Model (REM) was the most appropriate model. The results show that Dividend Yield has a positive and significant effect on Investment Performance (HPR), therefore the first hypothesis is accepted. This finding indicates that, during the observation period, the magnitude of dividend cash flow in YieldMax ETFs contributed meaningfully to total investment returns. On the other hand, the interaction variable between Dividend Yield and DCA is not significant, indicating that DCA does not moderate the relationship between Dividend Yield and Investment Performance. These findings imply that Dividend Yield is the main determinant of investment performance in YieldMax ETFs within the observation period, while the choice of market entry strategy through DCA does not show a significant moderating role.