NEOS MLP & Energy Infrastructure High Income ETF

MLPI

Market cap $6.02M

NEOS MLP & Energy Infrastructure High Income ETF (MLPI) offers direct exposure to high-quality midstream MLPs with an out-of-the-money covered call overlay. MLPI's physical structure enables investors to capture both underlying MLP income and option premiums, differentiating it from synthetic strategies. The fund's initial forward yield annualizes to a compelling 15.6%, among the highest in NEOS's covered call ETF suite.

Covered call ETFs promise high income and outperformance in sideways or declining markets, but face opportunity cost in bull markets. Despite strong AuM growth and new launches like NEOS MLP & Energy Infrastructure High Income ETF (MLPI), Covered Call ETFs are structurally suboptimal with inherent negative alpha. Covered call ETFs consistently underperform not only in rising markets due to capped upside, but also during market declines.

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.