NEOs ETFs: The brand new Earnings machine

Introduction: The Rise of Earnings-Targeted Choice ETFs

In a yield-starved market, income-seeking traders have gravitated towards option-based ETFs—funds that mix underlying exposures (equities, crypto, and so on.) with spinoff overlays (typically writing or promoting coated name choices) to ship month-to-month or common distributions. NEOs ETF (NEOS Investments’ suite) , YieldMax ETFs are two competing excessive yield etfs on this evolving nook of the earnings ETF panorama.

Whereas the earnings potential is alluring, the mechanics, danger tradeoffs, and tax penalties differ considerably. On this article, we:

• Examine NEOs ETF methods with YieldMax ETFs,

• Break down three flagship NEOs ETFs (SPYI, QQQI, BTCI),

• Study their efficiency, yield, danger, and ideally suited use circumstances

NEOs ETF vs YieldMax ETFs: Strategic Variations

What Are YieldMax ETFs?

YieldMax ETFs are constructed round artificial or derivative-based exposures to high-volatility property (e.g., Tesla, MicroStrategy, Coinbase) and generate earnings by systematically writing name choices. As InvestmentU notes, “YieldMax ETFs don’t personal the underlying shares straight. As an alternative, they use derivatives to simulate lengthy publicity … then generate earnings by systematically promoting name choices.” Funding U

These funds typically tout extraordinarily excessive yields—however these include elevated danger of NAV erosion, particularly when the underlying asset value shifts adversely. *InvestmentU’s “YieldMax ETFs and Alternate options” article illustrates how spectacular returns come at the price of focus and volatility. Funding U

What Are NEOs ETFs?

In distinction, the NEOs ETF household from NEOS Investments tends to pair broader benchmarks or crypto exposures (like S&P 500, Nasdaq-100, Bitcoin) with possibility methods to reap premium and supply month-to-month earnings. Due to the broader base, the volatility and idiosyncratic focus danger might be decrease (relative to single-stock exposures) — although the spinoff overlay nonetheless provides complexity.

Head-to-Head: YieldMax vs NEOs ETF

One warning typically flagged by trade voices (and echoed in ETF commentary) is that yields vastly exceeding what the underlying markets can sometimes help could also be unsustainable — in impact, the fund might be returning capital simply to fulfill distribution guarantees.

Though each methods provide earnings, yield-chasing with out consideration to danger and sustainability can backfire.

SPYI: NEOs S&P 500 Excessive Earnings ETF

What Is SPYI?

SPYI is NEOS’s flagship “excessive earnings” ETF constructed on the S&P 500 index + an possibility overlay (principally coated calls) to generate month-to-month earnings.

Efficiency & Yield

• Since its launch (August 2022), SPYI’s NAV-based annualized return has hovered round ~14.08% (as of August 2025).

• Market value returns are comparable, indicating modest premium/low cost inversion results.

• Its distribution yield is engaging in comparison with conventional fairness earnings funds, although a big share of distributions could also be categorised as Return of Capital (ROC), which erodes value foundation.

Strengths & Dangers

• Strengths: Broad U.S. fairness publicity with earnings overlay; much less focus danger than area of interest or single-stock earnings methods; established sufficient to point out some monitor report.

• Dangers:
   1. Capped upside in robust bull markets (possibility writing sacrifices some features).
   2. ROC-heavy distributions complicate tax planning and cut back value foundation over time.
   3. In extreme drawdowns, possibility premiums might not provide full safety.
   4. Liquidity and bid-ask spreads might add execution danger.

Learn Subsequent: 5 Month-to-month Dividend ETFs for Earnings Portfolios

QQQI: NEOs Nasdaq-100 Excessive Earnings ETF

What Is QQQI?

QQQI presents publicity to the Nasdaq-100 index plus possibility overlays, concentrating on greater yield and earnings by leveraging the tech/progress tilt of Nasdaq.

Efficiency & Yield

• Launched extra lately (January 2024), its shorter monitor report reveals stronger nominal returns versus SPYI in lots of comparability intervals.

• For example, in mid-2025, QQQI’s YTD efficiency outpaced SPYI in lots of metrics, although at the price of greater volatility and drawdowns.

• Volatility metrics present QQQI sometimes has greater customary deviation and deeper most drawdowns than SPYI (e.g. ~−20% vs ~−16%) in noticed intervals.

Strengths & Dangers

• Strengths: Larger earnings potential (as a result of volatility of underlying); extra upside seize in sure tech rallies (regardless of possibility drag).

• Dangers: Extra concentrated sector danger (tech-heavy publicity); possibility overlay might clip aggressive upside features; newer historical past means much less stress-tested; similar ROC / tax points as SPYI.

BTCI: NEOs Bitcoin Excessive Earnings ETF

What Is BTCI?

BTCI is NEOS’s enterprise into crypto: it gives publicity to Bitcoin (through ETPs / crypto proxies) and overlays possibility methods on that publicity to generate month-to-month earnings.

Efficiency & Yield

• Launched in October 2024.

• As of August 2025:
   - Its distribution fee (primarily based on the latest payout) has approached ~28%.
   - Cumulative returns since inception have been sturdy (≈ +49.5% in NAV phrases in that span).
   - Its market value has typically traded close to NAV, with small premiums/reductions (~0.10%).

• Nevertheless, a big portion of distributions are estimated to be Return of Capital (ROC ~ 95%), considerably affecting tax foundation.

Strengths & Dangers

• Strengths: Publicity to crypto upside mixed with earnings overlay, which few different merchandise straight provide.

• Dangers:
   1. Bitcoin’s inherent volatility is dramatic—possibility overlay might buffer however gained’t remove giant swings.
   2. Choice overlay on crypto is extra advanced (much less mature derivatives markets, liquidity, correlation mismatches).
   3. ROC heavy distributions erode foundation, complicating tax and long-term return.
   4. Restricted historic monitor report, particularly by way of crypto downturns.

Methods to Suppose About Match: Use Instances & Allocation Technique

Diversification & Correlation

• SPYI and QQQI have a tendency to maneuver collectively (excessive correlation), so utilizing each provides restricted hedging profit.

• BTCI can provide diversification from equities, however at the price of considerably greater volatility.

Yield vs Development Tradeoff

• For income-focused traders, all three are interesting earnings autos—however the earnings comes with trade-offs: capped upside, ROC erosion, and better danger.

• In robust bull markets, conventional fairness ETFs might outperform as a result of much less drag from possibility overlays.

Tactical Use Instances

• Earnings sleeve: In a total-return core portfolio, NEOs ETFs might fill the “earnings producing” slot slightly than the core fairness slot.

• Vary-bound / sideways markets: Choice-laden methods are likely to shine when underlying property are neither raging upwards nor crashing.

• Tax-efficient allocations: Given heavy ROC distributions, NEOs ETFs could also be higher held in tax-deferred accounts (e.g. IRAs) slightly than taxable accounts.

YieldMax vs NEOs: When One Could Edge Out the Different

• Should you’re snug taking concentrated bets and wish most yield, YieldMax could be alluring—however the danger of capital erosion is actual 

• For traders preferring considerably broader publicity with much less single-stock danger, NEOs ETFs provide a extra balanced publicity to option-based earnings.

Conclusion

NEOs ETF and YieldMax ETFs characterize two taste variants of the rising choices earnings ETF area. The NEOs suite (SPYI, QQQI, BTCI, and so on) tends to favor broader benchmarks over single-stock focus, which can provide a extra tempered danger profile whereas nonetheless delivering excessive distribution yields. YieldMax ETFs, against this, aggressively lean into yield through concentrated exposures and possibility overlays—however additionally they carry a higher hazard of capital erosion and volatility danger.

If I had been advising you, I’d deal with SPYI, QQQI, and BTCI as instruments inside the “earnings / various” sleeve of a diversified portfolio, not as replacements for core fairness or fixed-income holdings. And I’d lean towards holding them in tax-advantaged accounts to attenuate the drag from ROC distributions.