The dividend yield on the S&P 500 is 1.3%. As if by magic, nearly a dozen exchange-traded funds were offering payouts of at least 100% this week. This implies that for every $100 you invest, you might expect to earn more than $100 in yearly income. Several of these ETFs boasted yields of 130% to 230%.

"Often, much of the 'yield' is just your own money handed back to you, and the principal value of your investment could shrivel."

What’s more, you can’t assume the huge reported yields will last. They’re based on taking the ETF’s payout in the most recent month, multiplying it by 12 and dividing by the fund’s net asset value. That distribution rate can vary enormously as the underlying asset shoots up and down.

Take the YieldMax TSLA Option Income Strategy ETF, which sells options on Tesla stock. Its distribution rate, or implied yield, was 62.8% this week. The fund launched in November 2022 at a split-adjusted $40 per share. It traded this week under $8.50—roughly an 80% decline even though Tesla’s stock is up nearly 70% over the same period.

Piling risk in this many layers for individual investors is reminiscent of funds that rolled out right before the crash of 1929. Led by Goldman Sachs, firms built “pyramids” in which one fund bought another inside yet another, with leverage at each level.

"The best answer is an old maxim: You should be more concerned about the return of your money than the return on your money."