NEOS S&P 500 High Income ETF

SPYI

Market cap $7.07B

For investors focused on building long-term, compound returns, the strategy has shifted in recent years. Whilst buying a high-quality S&P 500 ETF still remains a Buffett-approved approach, several new options have recently become available for compound-focused investors.

It's historically rare to see a three-year winning streak of 20% or more for the S&P 500, but the index certainly came close last year.

TappAlpha SPY Growth & Daily Income ETF earns a Strong Buy rating for its superior yield and S&P 500 upside capture versus SPYI. TSPY delivers 13-14% yields and better total returns than SPYI, though with less downside protection due to its 0DTE options strategy. SPYI remains a Buy for its consistent 10%+ yields, tax efficiency, and lower volatility, but TSPY's higher payouts may better suit most income investors.

Dividend investing is increasingly vital amid higher rates and inflation, offering passive income and wealth compounding for retirement. Anchoring a portfolio with quality dividend ETFs like SCHD, FDVV, or CGDV can provide reliable income and potential outperformance. Combining high dividend growers (e.g., V, MA, WM) with stable high-yielders (e.g., VZ, O, ADC, STWD) balances growth and income.

A $600,000 portfolio split equally among GPIX, GPIQ, SPYI, and QQQI can generate ~$5,387 in monthly income with ~10.7% yield. Covered call ETFs provide direct equity exposure to S&P 500 and Nasdaq-100 constituents, offering diversification, capital appreciation, and tax-efficient monthly distributions. Dynamic option strategies in these ETFs allow for market-responsive income generation, with high return-of-capital percentages enhancing tax deferral benefits.

The NEOS S&P 500 High ETF (SPYI) offers compelling tech exposure and strong income potential, especially as rate cuts loom in 2026. SPYI's high concentration in Magnificent 7 stocks and a 0.68% expense ratio differentiate it from JEPI and GPIX, supporting its alpha potential. SPYI outperformed peers with a 16.4% one-year total return, driven by its tech-heavy portfolio and an aggressive covered call strategy.

SPYI (Neos S&P 500 High-Income ETF) has decisively outperformed JEPI in total return, yield, and distribution stability over the past 3+ years. SPYI captured 98% of S&P 500 upside in 2025 versus JEPI's 47%, driven by its full index exposure versus JEPI's active selection. SPYI offers a higher trailing 12-month yield (11.69%) and more stable monthly distributions than JEPI (7.49%), supporting reliable income.

I increased my forward projected dividend income by $86.77 (1.4%) in December, reaching $6,289.66. My portfolio strategy blends high-growth names like Broadcom (AVGO), Microsoft, and Visa with high-yielders such as SPYI and MPLX. Dividend reinvestments and increases, especially from AVGO and EPRT, drove nearly 83% of new forward income this month.

NEOS S&P 500 High Income ETF lacks downside protection despite appealing to retirees seeking high income. SPYI, like QQQI, faces distribution issues that undermine its suitability for retirement-focused portfolios. The ETF faces considerable risk from being invested in the constituents of the benchmark index with rich valuations.

NEOS S&P 500 High Income ETF earns a reiterated strong buy rating for its impressive balance of income and total returns. SPYI captured nearly all S&P 500 upside over the past year, delivering a 14.53% total return versus the index's 14.88%. The fund's flexible options strategy, consistent 11.7% yield, and tax-advantaged distributions underpin its appeal for income investors.