QQQI ETF's high yield masks principal return and capped Nasdaq gains, raising tax and performance concerns.

The NEOS Nasdaq-100 High Income ETF (QQQI) offers a high 14% yield, but most payouts are return of capital, not true income, which lowers cost basis and defers taxes. It charges a 0.68% fee, higher than the Invesco QQQ Trust (QQQ), and uses a call option overlay that caps upside gains, causing QQQI to lag QQQ's price returns. Monthly distributions create complex tax tracking. Alternatives like JPMorgan's JEPQ offer simpler tax treatment but lower yields. Investors should weigh tax impact, fees, and capped growth against income needs before choosing QQQI over direct Nasdaq exposure.