NEOS SPYI ETF utilizes covered calls for high monthly yields

The NEOS S&P 500 High Income ETF (SPYI) utilizes a covered call strategy to provide monthly distributions to investors. Since its launch in 2022, the fund has amassed approximately $13 billion in assets and maintains a distribution yield near 12%.

For the September 18, 2026, distribution, NEOS estimated that approximately 94% of the payment—$0.5014 of the $0.5338 per share—was a return of capital. Such payments typically reduce an investor’s cost basis rather than being taxed as ordinary dividends, though they can become taxable capital gains once the basis is exhausted.

While the fund aims to recapture some upside through the purchase of calls, its total return has historically lagged behind the S&P 500 index. As of late September 2026, the fund reported a 12.21% distribution rate alongside a 0.45% 30-day SEC yield, highlighting the distinction between annualized payment rates and standardized income estimates.