The NEOS S&P 500 High Income ETF (SPYI) pays monthly distributions that may include return of capital (ROC), which reduces your cost basis and increases taxable gains when you sell. While the cash payments feel like income, part of them quietly returns your own principal, deferring taxes but potentially increasing your tax bill later. This effect is invisible in tax-advantaged accounts like IRAs but important in taxable accounts. Investors should review SPYI's 19a-1 notices and 1099-DIV forms to understand the ROC portion and its impact on their taxes. For simpler exposure to the S&P 500, the SPDR S&P 500 ETF Trust (SPY) offers a cleaner dividend structure without ROC complications.
The NEOS S&P 500 High Income ETF (SPYI) offers a 12% monthly distribution, but about 96-97% of these payments are classified as return of capital, not taxable income. This means investors receive a refund of their investment principal, which reduces ...
If you retire before age 62, Social Security won't pay benefits until then, leaving a gap in income. Three ETFs—SPYI, DGRW, and HDV—offer monthly or quarterly dividends to generate income during this period. SPYI provides high monthly yields through ...
