NEOS S&P 500 High Income ETF (SPYI)
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SPYI: Save On Taxes With A Double-Digit Yield
The NEOS S&P 500 High Income ETF is a covered call fund with a unique twist: tax efficient Section 1256 contracts. These contracts allow a portion of short-term returns to be taxed as long-term capital gains. The strategy is well optimized for covered call funds, which trade frequently. The fund's covered call strategy increases income compared to just holding the S&P 500, and also serves as a partial hedge.
11%-Yielding One-Stop-Shop For Retiring On Dividends, With A Catch: SPYI
Neos S&P 500(R) High Income ETF offers a high monthly yield (~12% annualized) and diversified S&P 500 exposure, appealing for passive retirement income. However, this yield and diversification come with a catch. I detail the strengths and weaknesses of SPYI and share a potentially better approach to retiring on passive income from dividends.
An S&P 500 ETF With Income & Upside
The S&P 500 is a lot of things. In ETF form, that index represents an efficient, often cost-effective avenue for investors looking to tap into a trusted gauge of the largest U.S.-based companies.
NEOS S&P 500 High Income ETF (SPYI) FAQ
What is the stock price today?
On which exchange is it traded?
What is its stock symbol?
Does it pay dividends? What is the current yield?
What is its market cap?
Has NEOS S&P 500 High Income ETF ever had a stock split?
NEOS S&P 500 High Income ETF Profile
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Overview
The fund is a distinctive actively-managed Exchange Traded Fund (ETF) that specifically aims to meet its investment objective through a dual strategy focused on equity and options. This fund builds its core by investing in a broad portfolio of stocks precisely mirroring the S&P 500® Index. This composition ensures a solid foundation in well-established companies that constitute the significant part of the U.S. stock market. In parallel, the fund adopts a sophisticated call options strategy to potentially enhance its returns and manage risk. This strategy involves a balance between written (sold) and long (bought) call options on the S&P 500® Index itself, providing a unique approach to equity investment through the strategic use of derivatives. The intent is to capture growth opportunities in the market while seeking to offer some level of protection against downturns through the covered call options, which may be included under certain conditions. This blend of direct stock investments and careful options trading forms the core of the fund's operation, targeting investors who are keen on S&P 500® exposure complemented by the potential income and hedging benefits of options strategies.
Products and Services
- Portfolio of Stocks from the S&P 500® Index
- Call Options Strategy
This product focuses on acquiring shares from a broad spectrum of companies included in the S&P 500® Index. The intent is to replicate the performance of this major U.S. stock market index, which comprises large-cap U.S. equities. By investing in a diversified portfolio that reflects the Index, the fund aims to provide steady growth potential to its investors over time.
The call options strategy employed by the fund is multifaceted, consisting of both written (sold) and long (bought) positions on the S&P 500® Index. This approach is designed to enhance the fund's income through premiums received on written options, while bought call options may offer leveraged exposure to potential index gains. In specific market conditions, the fund may also engage in covered call options, aiming to generate additional income while offering a hedge against potential declines in the underlying stock portfolio. This strategy seeks to balance risk and return by leveraging options in a way that complements the fund's equity holdings.
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