Introduction: The Rise of Earnings-Centered Choice ETFs

In a yield-starved market, income-seeking buyers have gravitated towards option-based ETFs—funds that mix underlying exposures (equities, crypto, and many others.) with spinoff overlays (typically writing or promoting lined 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, threat 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, threat, and ideally suited 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 immediately. 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 threat 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 threat might be decrease (relative to single-stock exposures) — although the spinoff 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	Choice overlays + fairness/crypto publicity	Spinoff (artificial) publicity + aggressive choice writing
Yield potential	Excessive, however tempered by diversification	Extraordinarily excessive yields typically (however larger threat of capital return)
Danger profile	Volatility, spinoff threat, capped upside	Very excessive volatility, NAV erosion threat, focus threat
Tax / distribution classification	Many distributions as Return of Capital (ROC) lowering price foundation	Comparable ROC / capital erosion points
Historic monitor document	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 usually help could also be unsustainable — in impact, the fund may very well be returning capital simply to fulfill distribution guarantees.

Though each methods provide revenue, yield-chasing with out consideration to threat 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 lined 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 comparable, 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 labeled as Return of Capital (ROC), which erodes price foundation.

Strengths & Dangers

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

• Dangers:
   1. Capped upside in robust bull markets (choice writing sacrifices some features).
   2. ROC-heavy distributions complicate tax planning and cut back price foundation over time.
   3. In extreme drawdowns, choice premiums might not provide full safety.
   4. Liquidity and bid-ask spreads might add execution threat.

Learn Subsequent: 5 Month-to-month Dividend ETFs for Earnings Portfolios

QQQI: NEOs Nasdaq-100 Excessive Earnings ETF

What Is QQQI?

QQQI gives 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 lately (January 2024), its shorter monitor document reveals stronger nominal returns versus SPYI in lots of comparability intervals.

• As an 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 usually has larger normal deviation and deeper most drawdowns than SPYI (e.g. ~−20% vs ~−16%) in noticed intervals.

Strengths & Dangers

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

• Dangers: Extra concentrated sector threat (tech-heavy publicity); choice overlay might clip aggressive upside features; newer historical past means much less stress-tested; similar ROC / tax points as SPYI.

BTCI: NEOs Bitcoin Excessive Earnings ETF

What Is BTCI?

BTCI is NEOS’s enterprise into crypto: it supplies publicity to Bitcoin (through 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 fee (based mostly 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%).

• Nevertheless, 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 immediately provide.

• Dangers:
   1. Bitcoin’s inherent volatility is dramatic—choice overlay might buffer however gained’t remove massive swings.
   2. Choice overlay on crypto is extra complicated (much less mature derivatives markets, liquidity, correlation mismatches).
   3. ROC heavy distributions erode foundation, complicating tax and long-term return.
   4. Restricted historic monitor document, particularly via crypto downturns.

How one can Suppose About Match: Use Instances & Allocation Technique

Diversification & Correlation

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

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

Yield vs Development Tradeoff

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

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

Tactical Use Instances

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

• Vary-bound / sideways markets: Choice-laden methods are inclined 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 could be alluring—however the threat of capital erosion is actual 

• For buyers preferring considerably broader publicity with much less single-stock threat, NEOs ETFs provide 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 provide a extra tempered threat profile whereas nonetheless delivering excessive distribution yields. YieldMax ETFs, against this, aggressively lean into yield through concentrated exposures and choice overlays—however in addition they carry a larger hazard of capital erosion and volatility threat.

If I have been advising you, I’d deal with SPYI, QQQI, and BTCI as instruments inside 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.