SPYI: Don't Believe The Hype

Summary

  • Neos S&P 500(R) High Income ETF is a high-yield exchange-traded product that uses covered calls to generate income.
  • The SPYI exchange-traded fund has a flaw in its strategy, as it is generating almost no net investment income and relies heavily on return of capital.
  • SPYI is expensive, with an annual fee of 68 basis points, and has underperformed compared to the cheaper SPY ETF.
  • Looking for a helping hand in the market? Members of Timely Trader get exclusive ideas and guidance to navigate any climate. Learn More »

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High-yield exchange-traded products, or ETPs, have become all the rage among the income investor community. After all, who doesn’t want to buy an ETP, do nothing, and collect a double-digit yield? The problem is that some of them aren’t constructed all that well, and as is

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This article was written by

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Josh Arnold has been covering financial markets for a decade, utilizing a combination of technical and fundamental analysis to identify potential winners early on in their growth cycles. Josh's focus is mainly on growth stocks. His goal is efficient and profitable use of capital, which overly rigid buy-and-hold strategies do not allow.

Josh is the leader of the investing group Timely Trader where he focuses on limiting risk and maximizing potential reward. Features of Timely Trader include: real-time alerts, a model portfolio, technical charts, sentiment indicators, and sector analysis to find the best trading opportunities. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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About SPYI ETF

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