SPYI
SPYI
The NEOS S&P 500 High Income ETF (BATS: SPYI) is a covered-call-overlay ETF designed to generate high monthly income from S&P 500 exposure. Launched in August 2022, SPYI has grown to over $3B AUM. The fund holds S&P 500 stocks (or SPY/ES exposure) and systematically sells call options against the position, collecting option premium which is distributed monthly to shareholders. SPYI uses Section 1256 contracts (index options) which receive favorable 60/40 tax treatment — 60% of gains are taxed as long-term capital gains regardless of holding period, making the distributions more tax-efficient than JEPI-style ETFs. TTM yield is ~12.4%, paid monthly. Expense ratio is 0.68%.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| S&P 500 Equity Exposure | $0M | 100% | +0.0% | — | Underlying portfolio tracks S&P 500 |
| Covered Call Overlay | $0M | 0% | +0.0% | — | Index options (1256 contracts) sold against exposure |
| Blended Growth Rate | — | 100% | +0.0% | — | Weighted avg across segments |
| Metric | Value | Assessment |
|---|---|---|
| Revenue Trend | Growing 3yr | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue ($M) | $0 | $0 | $0 |
| Rev YoY Growth | — | — | — |
| Gross Margin | — | — | — |
| EBITDA ($M) | $0 | $0 | $0 |
| EBITDA Margin | — | — | — |
| Operating Income ($M) | $0 | $0 | $0 |
| Operating Margin | — | — | — |
| Net Income ($M) | $0 | $0 | $0 |
| Net Margin | — | — | — |
| EPS (diluted) | $0.00 | $0.00 | $0.00 |
| Free Cash Flow ($M) | $0 | $0 | $0 |
| Annual DPS | $5.780 | $6.120 | $6.170 |
| Total Debt ($M) | $0 | $0 | $0 |
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | -3.0% | -2.0% | 0.0% | 9.50% | $54 | ▲9.4% |
| 📊 Base | 0.0% | 0.0% | 0.0% | 9.50% | $65 | ▲30.8% |
| 🚀 Bull | 2.0% | 1.0% | 0.5% | 9.50% | $74 | ▲49.9% |
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $5.985 | $5.466 | $5.47 |
| Year 2 | Stage 1 | $5.805 | $4.842 | $10.31 |
| Year 3 | Stage 1 | $5.631 | $4.289 | $14.60 |
| Year 4 | Stage 1 | $5.462 | $3.799 | $18.40 |
| Year 5 | Stage 1 | $5.298 | $3.366 | $21.76 |
| Year 6 | Stage 2 | $5.192 | $3.012 | $24.77 |
| Year 7 | Stage 2 | $5.089 | $2.696 | $27.47 |
| Year 8 | Stage 2 | $4.987 | $2.413 | $29.88 |
| Year 9 | Stage 2 | $4.887 | $2.159 | $32.04 |
| Year 10 | Stage 2 | $4.789 | $1.933 | $33.97 |
| Terminal | — | TV=$50.41 | PV(TV)=$20.34 (37% of IV) | $54.32 |
| Intrinsic Value | — | — | PV(Divs) $33.97 + PV(TV) $20.34 | $54.32 |
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $6.170 | $5.635 | $5.63 |
| Year 2 | Stage 1 | $6.170 | $5.146 | $10.78 |
| Year 3 | Stage 1 | $6.170 | $4.699 | $15.48 |
| Year 4 | Stage 1 | $6.170 | $4.292 | $19.77 |
| Year 5 | Stage 1 | $6.170 | $3.919 | $23.69 |
| Year 6 | Stage 2 | $6.170 | $3.579 | $27.27 |
| Year 7 | Stage 2 | $6.170 | $3.269 | $30.54 |
| Year 8 | Stage 2 | $6.170 | $2.985 | $33.52 |
| Year 9 | Stage 2 | $6.170 | $2.726 | $36.25 |
| Year 10 | Stage 2 | $6.170 | $2.490 | $38.74 |
| Terminal | — | TV=$64.95 | PV(TV)=$26.21 (40% of IV) | $64.95 |
| Intrinsic Value | — | — | PV(Divs) $38.74 + PV(TV) $26.21 | $64.95 |
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $6.293 | $5.747 | $5.75 |
| Year 2 | Stage 1 | $6.419 | $5.354 | $11.10 |
| Year 3 | Stage 1 | $6.548 | $4.987 | $16.09 |
| Year 4 | Stage 1 | $6.679 | $4.645 | $20.73 |
| Year 5 | Stage 1 | $6.812 | $4.327 | $25.06 |
| Year 6 | Stage 2 | $6.880 | $3.991 | $29.05 |
| Year 7 | Stage 2 | $6.949 | $3.682 | $32.73 |
| Year 8 | Stage 2 | $7.019 | $3.396 | $36.13 |
| Year 9 | Stage 2 | $7.089 | $3.132 | $39.26 |
| Year 10 | Stage 2 | $7.160 | $2.889 | $42.15 |
| Terminal | — | TV=$79.95 | PV(TV)=$32.26 (43% of IV) | $74.41 |
| Intrinsic Value | — | — | PV(Divs) $42.15 + PV(TV) $32.26 | $74.41 |
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 7.5% | $93 | $98 | $104 | $111 | $120 |
| 8.0% | $86 | $90 | $95 | $100 | $107 |
| 8.5% | $80 | $83 | $87 | $92 | $97 |
| 9.0% | $75 | $78 | $81 | $84 | $89 |
| 9.5% | $70 | $73 | $75 | $78 | $82 |
| 10.0% | $66 | $68 | $70 | $73 | $76 |
| 10.5% | $63 | $64 | $66 | $68 | $71 |
| 11.0% | $60 | $61 | $63 | $64 | $66 |
| 11.5% | $57 | $58 | $59 | $61 | $62 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
| ETF | Strategy | Expense Ratio | Div Yield | Upside Capture | Note |
|---|---|---|---|---|---|
| SPYI (current) | S&P 500 + Calls | 0.68% | 12.4% | ~70% | Section 1256 tax-efficient |
| JPMorgan JEPI | S&P 500 + ELN | 0.35% | 7.8% | ~60% | Lower vol; less income |
| Global X XYLD | S&P 500 + Calls | 0.60% | 10.5% | ~55% | ATM calls; more conservative |
| NEOS QQQI | Nasdaq + Calls | 0.68% | 14.2% | ~65% | Higher vol; more income |
| SPY (passive) | Index-only | 0.09% | 1.1% | 100% | Full upside; low income |
| Metric | Value |
|---|---|
| Annual DPS | $6.170 |
| Current Yield | 12.43% |
| Consecutive Growth Years | 3 |
| 1-yr DPS CAGR | +0.8% |
| 3-yr DPS CAGR | +3.4% |
| 5-yr DPS CAGR | +3.4% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 326.0% ⚠️ |
| FCF Payout Ratio | 150.0% ⚠️ |
| Sustainability Verdict | Watch |
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|
Bull case (income vehicle): SPYI delivers 12%+ annual yield with tax efficiency and monthly payments. For income-focused portfolios (retirees, withdrawal-phase), this is one of the best yield-per-unit-of-equity-risk vehicles available. The S&P 500 underlying provides diversification. Section 1256 tax treatment means ~37% of distributions avoid ordinary income rates. In flat-to-modestly-up markets, SPYI outperforms on an after-tax-income basis. Holds as a core income sleeve.
Bear case: Covered call ETFs structurally underperform in bull markets — the written calls cap upside. In 2023–2024, SPY returned ~50% cumulatively while SPYI returned ~35% (including distributions). More critically, in prolonged bear markets, both NAV and option premium income decline — leading to potential distribution cuts and principal loss. The 94% ROC classification signals that distributions are eroding cost basis, which compounds if NAV doesn't recover. SPYI is NOT a hold-forever vehicle.
Base case: SPYI is appropriate for an income sleeve at 5–10% of portfolio, not as a core equity allocation. The 12%+ yield is real and tax-efficient. Hold for income; do not expect total-return outperformance. Rebalance if SPYI exceeds 10% of total portfolio.
Compensation: Equity-based compensation present
There are 2 members of the management team with an average tenure of 3.50 years: Garrett Paolella (2022) and Troy Cates (2022). Management tenure is more important for actively managed ETFs than passive index ETFs. The ETF
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SPYI seeks high monthly income in a tax efficient manner, with the potential for upside appreciation in rising markets.
Current and Historical Performance Performance for Neos S&P 500(R) High Income ETF on Yahoo Finance.
A high-level overview of NEOS S&P 500 High Income ETF (SPYI). Stay up to date on the latest price, chart, news, analysis, fundamentals, trading and investment tools.
NEOS ETFs are distributed by Foreside Fund Services, LLC. QQQI was awarded "Best New Active ETF" at the 2025 ETF.com Awards. There were ~25 submissions for "Best New Active ETF". The cri
Learn everything you need to know about NEOS S&P 500(R) High Income ETF (SPYI) and how it ranks compared to other funds. Research performance, expense ratio, holdings, and volatility to see if it's the right fund for you.
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$60 | Begin position |
| Tier 2 — Add | ≤$60 | Add on weakness |
| Tier 3 — Full | ≤$57 | Full allocation |
| Sell Alert | ≥$63 | Above fair value — consider trimming |
Hold — Income Allocation. SPYI delivers what it promises: ~12% monthly income from S&P 500 exposure. At $49.65, the DDM-derived fair value based on distributions is in the $45–$55 range — current price is fair. Appropriate as 5–10% of income-focused portfolio. Do not overallocate — capped upside and NAV erosion risk are real in strong markets. For total-return objectives, use SPY instead. For income, SPYI is a reasonable choice among covered call ETFs due to tax efficiency and monthly pay.
| Assumption | Rationale / Notes |
|---|---|
| Model Choice | DDM using monthly distributions as cash flow base. SPYI has no earnings or FCF — it distributes option premium and dividends collected from underlying holdings. |
| Ke Selection | Used Ke=9.5% — higher than SPY (8.5%) due to option strategy complexity, concentrated premium harvesting, and NAV erosion risk in volatile markets. |
| Terminal Growth | gT=0% Base — covered call ETFs do not structurally grow distributions. The goal is income maintenance, not growth. Any growth comes from market appreciation that boosts premium income. |
| ROC Treatment | 94% of 2025 distributions were return of capital. This is tax-efficient (deferred) but erodes cost basis. Over a 10-year hold, cost basis could approach zero, making eventual sale fully taxable. |
| Sanity Check | Base IV ~$50 vs. current price $49.65. Model is well-calibrated. This is an income vehicle; valuation is secondary to yield sustainability. |