Introduction: The Rise of Earnings-Centered Choice ETFs

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

Whereas the earnings potential is alluring, the mechanics, threat tradeoffs, and tax penalties differ considerably. On this article, we:

Evaluate NEOs ETF methods with YieldMax ETFs,

Break down three flagship NEOs ETFs (SPYI, QQQI, BTCI),

Study their efficiency, yield, threat, and splendid 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 belongings (e.g., Tesla, MicroStrategy, Coinbase) and generate earnings by systematically writing name choices. As InvestmentU notes, “YieldMax ETFs don’t personal the underlying shares instantly. 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 value shifts adversely. *InvestmentU’s “YieldMax ETFs and Alternate 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 possibility 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 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 so on.
Narrower, typically single shares or crypto proxies

Earnings technology methodology
Choice overlays + fairness/crypto publicity
Spinoff (artificial) publicity + aggressive possibility writing

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

Threat 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 value foundation
Comparable ROC / capital erosion points

Historic observe 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 sometimes help could also be unsustainable — in impact, the fund might be returning capital simply to satisfy distribution guarantees.

Though each methods provide 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 possibility overlay (largely 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 value 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 categorized 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 observe document.

Dangers: 1. Capped upside in robust bull markets (possibility writing sacrifices some features). 2. ROC-heavy distributions complicate tax planning and scale back value foundation over time. 3. In extreme drawdowns, possibility premiums could not provide 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 possibility overlays, concentrating on larger yield and earnings by leveraging the tech/development tilt of Nasdaq.

Efficiency & Yield

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

As an illustration, 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 earnings potential (on account of volatility of underlying); extra upside seize in sure tech rallies (regardless of possibility drag).

Dangers: Extra concentrated sector threat (tech-heavy publicity); possibility overlay could 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 (by way of ETPs / crypto proxies) and overlays possibility methods on that publicity to generate month-to-month earnings.

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 value 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 earnings overlay, which few different merchandise instantly provide.

Dangers: 1. Bitcoin’s inherent volatility is dramatic—possibility overlay could buffer however gained’t get rid of giant 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 observe 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 provide diversification from equities, however at the price of considerably larger volatility.

Yield vs Progress Tradeoff

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

In robust bull markets, conventional fairness ETFs could outperform on account of much less drag from possibility overlays.

Tactical Use Circumstances

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

Vary-bound / sideways markets: Choice-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) fairly than taxable accounts.

YieldMax vs NEOs: When One Could Edge Out the Different

When you’re comfy taking concentrated bets and need 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 provide 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 on) 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, in contrast, aggressively lean into yield by way of concentrated exposures and possibility overlays—however additionally they carry a higher hazard of capital erosion and volatility threat.

If I had 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.