Introduction: The Rise of Earnings-Centered Possibility ETFs

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

Whereas the earnings 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 ultimate use instances

NEOs ETF vs YieldMax ETFs: Strategic Variations

What Are YieldMax ETFs?

YieldMax ETFs are constructed round artificial or derivative-based exposures to high-volatility property (e.g., Tesla, MicroStrategy, Coinbase) and generate earnings 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 earnings 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 earnings. Due to the broader base, the volatility and idiosyncratic focus threat might be decrease (relative to single-stock exposures) — although the by-product overlay nonetheless provides complexity.

Head-to-Head: YieldMax vs NEOs ETF

Characteristic
NEOs ETF
YieldMax ETFs

Underlying publicity
Broad indices (S&P 500, Nasdaq-100), Bitcoin, and so forth.
Narrower, typically single shares or crypto proxies

Earnings technology technique
Possibility overlays + fairness/crypto publicity
Spinoff (artificial) publicity + aggressive choice writing

Yield potential
Excessive, however tempered by diversification
Extraordinarily excessive yields typically (however increased threat of capital return)

Danger profile
Volatility, by-product threat, capped upside
Very excessive volatility, NAV erosion threat, focus threat

Tax / distribution classification
Many distributions as Return of Capital (ROC) decreasing value 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 assist could also be unsustainable — in impact, the fund might be returning capital simply to fulfill distribution guarantees.

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

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 earnings funds, although a big share of distributions could also be categorised as Return of Capital (ROC), which erodes value foundation.

Strengths & Dangers

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

Dangers: 1. Capped upside in sturdy bull markets (choice writing sacrifices some features). 2. ROC-heavy distributions complicate tax planning and scale 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 threat.

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

QQQI: NEOs Nasdaq-100 Excessive Earnings ETF

What Is QQQI?

QQQI provides publicity to the Nasdaq-100 index plus choice overlays, concentrating on increased yield and earnings by leveraging the tech/progress tilt of Nasdaq.

Efficiency & Yield

Launched extra just lately (January 2024), its shorter monitor document exhibits stronger nominal returns versus SPYI in lots of comparability intervals.

As an illustration, in mid-2025, QQQI’s YTD efficiency outpaced SPYI in lots of metrics, although at the price of increased volatility and drawdowns.

Volatility metrics present QQQI usually has increased commonplace deviation and deeper most drawdowns than SPYI (e.g. ~−20% vs ~−16%) in noticed intervals.

Strengths & Dangers

Strengths: Larger earnings 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 could clip aggressive upside features; 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 (through ETPs / crypto proxies) and overlays choice methods on that publicity to generate month-to-month earnings.

Efficiency & Yield

Launched in October 2024.

As of August 2025: - Its distribution price (based mostly on the newest payout) has approached ~28%. - Cumulative returns since inception have been sturdy (≈ +49.5% in NAV phrases in that span). - Its market worth has usually 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 earnings overlay, which few different merchandise immediately supply.

Dangers: 1. Bitcoin’s inherent volatility is dramatic—choice overlay could buffer however received’t get rid of massive 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 document, particularly by crypto downturns.

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 increased volatility.

Yield vs Development Tradeoff

For income-focused traders, all three are interesting earnings autos—however the earnings comes with trade-offs: capped upside, ROC erosion, and better threat.

In sturdy 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 “earnings producing” slot reasonably than the core fairness slot.

Vary-bound / sideways markets: Possibility-laden methods are inclined to shine when underlying property 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) reasonably than taxable accounts.

YieldMax vs NEOs: When One Could Edge Out the Different

If you happen to’re snug taking concentrated bets and wish most yield, YieldMax is likely to be alluring—however the threat of capital erosion is actual 

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

Conclusion

NEOs ETF and YieldMax ETFs symbolize two taste variants of the rising choices earnings ETF area. The NEOs suite (SPYI, QQQI, BTCI, and so forth) tends to favor broader benchmarks over single-stock focus, which can supply a extra tempered threat profile whereas nonetheless delivering excessive distribution yields. YieldMax ETFs, in contrast, aggressively lean into yield through concentrated exposures and choice overlays—however additionally 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 throughout the “earnings / different” 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 attenuate the drag from ROC distributions.