Introduction: The Rise of Earnings-Targeted Possibility ETFs

In a yield-starved market, income-seeking traders have gravitated towards option-based ETFs—funds that mix underlying exposures (equities, crypto, and many others.) with by-product 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 revenue ETF panorama.

Whereas the revenue 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),

• Look at their efficiency, yield, danger, and supreme 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 belongings (e.g., Tesla, MicroStrategy, Coinbase) and generate revenue by systematically writing name choices. As InvestmentU notes, “YieldMax ETFs don’t personal the underlying shares straight. As a substitute, they use derivatives to simulate lengthy publicity … then generate revenue 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 worth shifts adversely. *InvestmentU’s “YieldMax ETFs and 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 choice methods to reap premium and supply month-to-month revenue. Due to the broader base, the volatility and idiosyncratic focus danger might be decrease (relative to single-stock exposures) — although the by-product overlay nonetheless provides complexity.

Head-to-Head: YieldMax vs NEOs ETF

Function	NEOs ETF	YieldMax ETFs
Underlying publicity	Broad indices (S&P 500, Nasdaq-100), Bitcoin, and many others.	Narrower, typically single shares or crypto proxies
Earnings technology methodology	Possibility overlays + fairness/crypto publicity	By-product (artificial) publicity + aggressive choice writing
Yield potential	Excessive, however tempered by diversification	Extraordinarily excessive yields typically (however larger danger of capital return)
Danger profile	Volatility, by-product danger, capped upside	Very excessive volatility, NAV erosion danger, focus danger
Tax / distribution classification	Many distributions as Return of Capital (ROC) decreasing value foundation	Comparable ROC / capital erosion points
Historic monitor file	Reasonably established for some (e.g. SPYI)	Newer, much less predictable in excessive market shifts

One warning typically flagged by business 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 may very well be returning capital simply to fulfill distribution guarantees.

Though each methods supply revenue, 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 revenue” ETF constructed on the S&P 500 index + an choice overlay (principally coated calls) to generate month-to-month revenue.

Efficiency & Yield

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

• Market worth returns are related, indicating modest premium/low cost inversion results.

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

Strengths & Dangers

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

• Dangers:
   1. Capped upside in robust bull markets (choice writing sacrifices some positive factors).
   2. ROC-heavy distributions complicate tax planning and cut back value foundation over time.
   3. In extreme drawdowns, choice premiums could not supply full safety.
   4. Liquidity and bid-ask spreads could 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 choice overlays, focusing on larger yield and revenue by leveraging the tech/development tilt of Nasdaq.

Efficiency & Yield

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

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

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

Strengths & Dangers

• Strengths: Greater revenue potential (resulting from volatility of underlying); extra upside seize in sure tech rallies (regardless of choice drag).

• Dangers: Extra concentrated sector danger (tech-heavy publicity); choice overlay could clip aggressive upside positive factors; newer historical past means much less stress-tested; identical 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 (by way of ETPs / crypto proxies) and overlays choice methods on that publicity to generate month-to-month revenue.

Efficiency & Yield

• Launched in October 2024.

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

• Nonetheless, 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 revenue overlay, which few different merchandise straight supply.

• Dangers:
   1. Bitcoin’s inherent volatility is dramatic—choice overlay could buffer however received’t remove giant swings.
   2. Possibility 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 file, particularly by way of crypto downturns.

The way to Assume About Match: Use Circumstances & Allocation Technique

Diversification & Correlation

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

• BTCI can supply diversification from equities, however at the price of considerably larger volatility.

Yield vs Development Tradeoff

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

• In robust bull markets, conventional fairness ETFs could outperform resulting from much less drag from choice overlays.

Tactical Use Circumstances

• Earnings sleeve: In a total-return core portfolio, NEOs ETFs could fill the “revenue producing” slot quite than the core fairness slot.

• Vary-bound / sideways markets: Possibility-laden methods are likely to shine when underlying belongings 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) quite than taxable accounts.

YieldMax vs NEOs: When One Might Edge Out the Different

• For those who’re comfy taking concentrated bets and wish most yield, YieldMax may be alluring—however the danger of capital erosion is actual 

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

Conclusion

NEOs ETF and YieldMax ETFs characterize two taste variants of the rising choices revenue ETF house. The NEOs suite (SPYI, QQQI, BTCI, and many others) tends to favor broader benchmarks over single-stock focus, which can supply a extra tempered danger profile whereas nonetheless delivering excessive distribution yields. YieldMax ETFs, against this, aggressively lean into yield by way of concentrated exposures and choice overlays—however in addition they carry a larger hazard of capital erosion and volatility danger.

If I had been advising you, I’d deal with SPYI, QQQI, and BTCI as instruments throughout the “revenue / 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 reduce the drag from ROC distributions.