MLPI sports a massive 14.9% distribution rate, on the back of its midstream energy portfolio and covered call strategy. Covered calls means reduced upside potential, but gains could be reasonably good regardless, with the fund seeing double-digit price gains these past few months. I'm concerned about the fund's performance during a downturn and its inmediate aftermath.
NEOS MLP & Energy Infrastructure High Income ETF remains my top covered call ETF pick for retirement income portfolios. MLPI offers a compelling 15.1% annualized yield, resilient cash flows, and value-oriented midstream assets, supporting durable income and downside protection. Covered call overlay enhances yield and mitigates downside, though basis risk may cause underperformance during sharp index rallies.
NEOS' MLP & Energy Infrastructure High Income ETF offers a near 15% yield with monthly, tax-efficient distributions and no K-1, targeting income-focused investors. MLPI combines MLPs and energy infrastructure C-corps with a covered call overlay, balancing high income and some growth potential, though capping upside versus pure-play peers. MLPI's short track record and covered call strategy introduce risks of NAV erosion and underperformance in prolonged bear markets or severe pullbacks.
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