NEOS S&P 500 High Income ETF

SPYI

Market cap $8.84B

The active management of SPYI's options strategy currently results in a 12% distribution while maintaining exposure to the S&P 500. The added value lies in the flexibility of the options strategy, an element not so common among buy-write ETFs. Compared to XYLD and JEPI, SPYI's less-capped structure allows greater upside participation during equity recoveries, while its higher AUM and yield outshine similar active ETF GPIX.

NEOS S&P 500 High Income ETF remains a buy for its defensive, income-focused approach amid market uncertainty and volatility. SPYI offers a 12%+ starting yield with monthly, tax-efficient distributions, leveraging an OTM call spread strategy to generate income and partial upside. While SPYI underperforms the S&P 500 over long periods, it excels during sideways or volatile markets, making it ideal for income-oriented, defensive investors.

I advocate for value-oriented covered call ETFs with underlying holdings beyond AI-saturated large-cap growth indices like SPY and QQQ. The risks for NAV erosion and income declines are higher on this front. Despite these risks, including some QQQ/SPY-linked covered call ETFs could enhance diversification and capture higher yields from volatility and growth.

I achieved a record $912.86 in monthly dividends and added $308.68 in forward income, reaching $6,883.46 in annual projected dividends. New capital contributions and purchases, particularly in SPYI and ADC, drove forward income growth this month. My portfolio yield on cost stands at 4.83% versus a current yield of 3.77%, reflecting disciplined accumulation and reinvestment.

Cinthia Murphy, investment strategist at VettaFi, joined Nate Geraci on this week's ETF Prime to discuss record ETF flows in the first quarter despite challenging market conditions. The industry exceeded $460 billion in total flows, a 50% year-over-year increase from Q1 2025, according to Murphy.

Covered call ETFs offer attractive monthly yields, often exceeding 10%, appealing to income-focused investors. Most top covered call ETFs are heavily concentrated in large-cap growth, specifically S&P 500 and Nasdaq-100 exposures. This concentration introduces significant risk, as these ETFs exhibit strong performance correlations and similar downside profiles.

The Dividend Harvesting Portfolio has delivered a 35.51% return on invested capital, emphasizing income growth and risk mitigation amid market volatility. Recent additions include SPYI, QQQI, and STWD, capitalizing on market weakness and locking in double-digit yields with a focus on undervalued income assets. Forward annualized dividend income has reached $2,913.80, with monthly and yearly dividend growth accelerating and compounding effects intensifying.

NEOS Investments' high-income ETFs deliver monthly distributions with tax efficiency, leveraging section 1256 options for enhanced yields and lower tax burdens. QQQI, SPYI, and other NEOS equity funds offer yields up to 14.6%, with most distributions classified as return of capital, supporting both income and portfolio diversification. Recent NEOS launches in alternatives—BTCI, NEHI, IAUI, MLPI—expand high-yield, tax-advantaged opportunities, though volatility and distribution variability warrant careful allocation.

The Schwab US Dividend Equity ETF (SCHD) has accumulated over $83 billion in assets, making it one of the biggest dividend funds in the United States.  SCHD ETF main limitation is its low dividend yield  This growth has been driven by the ongoing rotation from growth to value, and the fact that it has a tiny expense ratio of just 0.06% and the fact that it has a long track record of dividend growth.

QDPL amplifies dividend exposure via futures, outperforming only when actual dividends exceed expectations significantly, making returns dependent on narrow, less predictable market conditions. SPYI generates income through covered call spreads, monetizing volatility and time, enabling steadier performance across range-bound, declining, or moderately rising markets without forecasting accuracy. Historical comparisons show SPYI keeps pace in many bullish periods and outperforms in slower markets, while QDPL's edge appears mainly in strong, expectation-beating dividend environments.