NEOS Real Estate High Income ETF

IYRI

Market cap $163M

IYRI is a REIT-focused covered call ETF. It is one of the few covered call ETFs that looks solid from both sides - keeping the opportunity cost limited and providing downside protection from the AI bubble. In the article I detail why I have become even more bullish on IYRI than earlier in September this year.

I rate Neos Real Estate High Income ETF (IYRI) a buy for its high 10.7% yield and tax-efficient distributions. IYRI's option-writing strategy enables strong income and capital preservation, outperforming traditional REIT ETFs and high-yield peers since inception.

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 Real Estate High Income ETF is rated a Buy for income-focused investors seeking high monthly distributions. IYRI offers an 11.2% forward yield, low 0.68% expense ratio, with active professional options management. The ETF outperformed sector benchmarks since inception, with most distributions classified as return of capital for potential tax efficiency.

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.

NEOS Real Estate High Income ETF offers high monthly income through a call-writing strategy on real estate exposure. IYRI closely tracks the Dow Jones U.S. Real Estate Capped Index but differentiates itself with a laddered call-writing strategy to generate a monthly payout. Since its January 2025 launch, IYRI has outperformed IYR, benefiting from option premiums without capping upside, thanks to a relatively non-volatile real estate sector.

The real estate sector is often considered fertile for income investors. That view is likely being amplified against the backdrop of expectations that the Fed  has several more interest rate cuts ahead of it.

NEOS Investments offer high yielding monthly income ETFs based on options strategies on equity and alternative investments. As a secondary priority, the ETFs seek capital appreciation from the underlying securities held. Four of the funds use Section 1256 Index Option Contracts, which treat distributions as 60% long term and 40% short term capital gains.