Forget OMAH: Own Berkshire's Holdings Directly for Zero Annual Fees Instead

VistaShares’ OMAH targets ~15% annual income via a covered-call overlay on a Berkshire-linked equity basket, but charges a 0.98% net expense ratio that drains $98 per $10,000 annually from NAV. The strategy caps upside above option strikes and distributions may include return of capital, implying tax/character complexity rather than pure earned income. The article notes OMAH rose 10.36% over the past year vs BRK.B’s 1.48%, but over long horizons the lower-cost alternative (BRK.B at 0% expense) outperforms, suggesting the fee + upside cap is a meaningful trade-off.

Analysis

This is less a Berkshire exposure than a packaged short-volatility bet on a quality-factor basket. The economic transfer is simple: investors give up upside convexity in the exact names that drive long-run compounding, and in exchange they pay a fee to receive a smoother distribution stream. In a persistent bull market, that structure reliably shifts value from the holder to the wrapper sponsor and leaves the investor under-owned in the strongest trend regime.

The key second-order effect is benchmark drift. If large-cap growth leadership persists, OMAH should lag both BRK.B and a plain S&P 500 proxy because the call overwrite truncates the best-performing slices of the basket while the fee compounds against NAV. If realized volatility stays elevated but direction remains positive, the fund can still appear attractive on headline payout, which is exactly when performance drag is most likely to be underestimated.

The contrarian case is that this product may be fine in a flat-to-down, range-bound tape where investors explicitly want monetized carry and are indifferent to upside. But that is a narrower use case than the marketing implies, and the yield is only as good as the future option-premium environment; a vol crush or a sustained melt-up would reduce distributable cash flow and widen the relative performance gap. The main falsifier for a bearish view is a prolonged sideways market with stable volatility, where the wrapper’s income stream offsets the fee and the foregone upside matters less.

Key Decisions for Investors

• Long BRK.B / short OMAH in a market-neutral pair for 3-6 months: thesis is that direct ownership should compound better as soon as equities trend up, while OMAH bleeds fee drag and upside cap. Use the spread as the cleaner expression rather than outright shorting OMAH.
• Prefer VOO or BRK.B over OMAH for new capital on any dip in megacaps: the risk/reward is favorable because you keep full upside participation and avoid the embedded overwrite tax. This is especially attractive if implied vol on AAPL/GOOGL/MA remains subdued.
• If income is the only objective, sell cash-secured puts on BRK.B or use a lower-fee covered-call ETF instead of buying OMAH: same monetization concept, less structural fee leakage. Monitor whether the fund’s monthly payout is being supported by option premia or by return of capital.
• Watch OMAH versus BRK.B relative performance over the next 1-3 months: if the ratio continues to underperform in an up tape, it confirms the wrapper is behaving like a capped-carry product rather than a true Berkshire proxy. Consider adding to the pair if BRK.B breaks to new highs.
• Avoid chasing OMAH after any short-term distribution-driven bid: the yield headline can attract flows, but the longer-horizon total return math remains unfavorable if the market stays constructive. Falsifier is a prolonged sideways market with stable vol, where the income stream can offset some of the drag.