NEOS Boosted Nasdaq-100 High Income ETF

XQQI

Market cap $73.3M

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.

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.

NEOS Boosted Nasdaq-100 High Income ETF (XQQI) targets 150% exposure to QQQI's strategy, aiming for 19-23% annualized yields. XQQI employs synthetic options and direct holdings instead of swaps, minimizing daily performance drag and closely tracking intended leverage. Downside risks are substantial; capped upside from covered calls and amplified losses can cause permanent NAV erosion in adverse markets.

The ETF ecosystem welcomed more than 50 new launches in February according to ETF Database data. The February 2026 crop of funds, with inception dates between February 1 and 28, added to the burgeoning income and nuclear ETF segments, for example.

There's an ongoing shift in how investors access income through ETFs. No longer is sourcing income a pursuit centered solely on fixed income assets.