NEOS Gold High Income ETF

IAUI

Market cap $236M

In an easing monetary policy environment, yields start to fall in line with rate cuts. Bond investors might be seeking to supplant the income they've grown accustomed to.

The odds for a serious correction are not low. In this context, high-yield investing might not sound as the smartest idea, especially for durable or retirement income portfolios. Fortunately, in markets everything is not black or white.

NEOS Gold High Income ETF offers a covered call strategy on gold, targeting high monthly income and potential appreciation. IAUI delivers a 12.53% distribution rate, with approximately 85% of distributions classified as return of capital. The fund stands out due to its straightforward structure and is managed by a team with a strong track record in covered call ETFs.

The market seems to question the true fair value of BDC portfolios. There is a fear that the BDCs will start to report elevated non-accruals, which would make their life more difficult (as they have already a lower interest rate problem at hand). For durable and high-yield income investors this has created a truly enticing and timely opportunity, which simply has to be explored given the direction of overall asset yields.

Yield for traditional income sources have started to compress. For income-oriented investors, who seek to build a reliable passive income machine it causes a real headache. To hit a certain target income figure, investors have to assume either higher risks, extend time horizon or save/invest more capital.

WESTPORT, Conn.--(BUSINESS WIRE)--NEOS Investments, an asset management firm comprised of leaders and pioneers in the options-based ETF space, announces November monthly distribution amounts for their suite of ETFs that pursue monthly income and tax efficiency across core portfolio exposures.

NEOS Gold High Income ETF offers a 12% annualized yield and monthly distributions by selling covered calls on gold ETPs. IAUI is best suited for periods of gold price consolidation, providing steady income and potential outperformance versus IAU during sideways markets. While IAUI underperforms during strong gold rallies, its drawdowns are milder, and the fund balances income with capital appreciation.

The AI is increasingly turning from an opportunity to a risk. There are not many places to hide that would still offer high return, and, especially, high income potential. Covered call ETF space is a viable alternative, but there is a huge caveat.

Covered call ETFs have surged in popularity, but most are heavily concentrated in AI-driven indices, like QQQ and SPY. AI valuations appear stretched, and a correction could hit covered call ETF investors, as hard as pure index, or AI stockholders. The question is how to navigate this.

Gold has doubled in price in the past two years.