Counter argument, CCF's deliver dividends even when the market crabs sideways.
but their total return is still basically zero. Again, the dividend is just an illusion. For you to stay neutral here, you have to reinvest those dividends.
If you actually took out those dividends, you would get horrific NAV erosion in a sideways market. So you have to keep reinvesting them. In other words, you're paying someone a fee just for your money to stay neutral. It's fucking garbage.
You can just buy the underlying, and in a sideways market, it will just naturally go up and down and then go net sideways, and you pay nothing.
MSTY will perform well even when MSTR isn't on a bull run, and still captures some of the upwards momentum.
I get what you're saying here, but why buy MSTY if you think the underlying is going to drop? Why buy any CCF to take advantage of "less drop" compared to the underlying. The CCF still drops, just slightly less.
But MSTY allows you to have a comparatively extremely high rate of return on a neutral-bullish outlook, and can be sold off on a bear run.
I mean, in this case, MSTR has so much more upside potential compared to MSTY (normally CCFs aren't quite that bad, but yeah MSTY is one of the worst compared to its underlying asset), that even after a bear period, MSTR is still up compared to MSTY because it had so much more gains when bitcoin goes up. So that advantage, of the CFF catching up to the underlying in a bear period kinda gets wiped out. Specifically in MSTY's case. Other CCFs are not as bad. MSTY is one of the worst ones out there.
Why would anyone ever buy MSTY when you could just buy MSTR instead?