The NEOS S&P 500 High Income ETF (SPYI) offers a headline yield near 12%, but about 95% of its payouts this year are return of capital, meaning investors are getting back their own principal rather than income. SPYI charges a high 0.68% fee compared to cheaper S&P 500 ETFs like VOO, which impacts long-term returns. Its covered-call strategy limits upside gains, and return of capital distributions lower your cost basis instead of being taxed as income immediately. Investors should check their statements to understand how much of their payout is actual income versus return of capital before deciding if SPYI fits their investment goals.
Covered-call ETFs offering 8%+ yields generate mostly non-qualified income taxed at ordinary rates in taxable accounts, reducing net returns. Holding four specific ETFs—SPYI, JEPI, JEPQ, and DIVO—in a Roth IRA shields investors from these taxes, pres...
Covered call ETFs from NEOS Investments generate high income by selling options on U.S. equity indexes, with distribution rates between 12% and 14%. These ETFs perform best in volatile, range-bound markets by harvesting option premiums driven by impl...
Retirees relying on the JPMorgan Equity Premium Income ETF (JEPI) for monthly income may face tax challenges due to a $12,000 senior deduction phase-out starting at $150,000 modified adjusted gross income (MAGI). JEPI's distributions are mostly ordin...
Money market funds currently offer yields around 3.5%, closely matching headline inflation, resulting in near-zero real returns for investors. Despite this, a record $8.44 trillion remains parked in these funds due to their safety and liquidity. To i...
