High Profits: Uncover the Secret to Success with Neos S&P 500 High Income ETF SPYI for Income Investors in 2024

Boston, MA – Finding ways to generate income in the current market can be challenging, especially with high prices and fluctuating inflation rates. Many investors focusing on dividends and income are facing difficulties due to rising interest rates in today’s economic environment. One investment option gaining popularity among income-focused investors is covered call funds, with strategies like the one used by the successful Neos S&P 500 High Income ETF (SPYI).

Over the last three years, SPYI has provided investors with a total return of 19.36%, while the S&P 500 has offered a total return of 28.89% during the same period. An analysis of SPYI in August of last year rated the fund as a buy, citing its strong options strategy and market environment. Today, the fund is being upgraded to a strong buy, as its options strategy is poised to outperform in a potentially more volatile year amid low growth expectations, global tensions, and political uncertainty.

With an expense ratio of .68%, SPYI manages over $1.13 billion in assets and offers a trailing yield of 12.10%. The fund seeks to track the S&P 500 and currently holds a diverse portfolio, with significant holdings in technology, financials, healthcare, and other sectors. Notable holdings include Microsoft, NVIDIA, Amazon, and Apple.

SPYI’s options strategy involves buying and selling monthly index options against its equity holdings, with a shift towards primarily selling covered calls in late 2023. While this strategy limits upside potential, it also leaves the fund with unlimited downside risk. The fund’s monthly payouts are expected to be taxed at ordinary income rates due to the shift in options strategy.

Compared to other funds like XYLD and JEPI, SPYI has outperformed and underperformed respectively over the last three years based on total returns. The covered call strategy of SPYI is particularly effective in a range-bound market with elevated volatility, making it a promising investment option in the current market environment of political and economic uncertainty.

As volatility levels are expected to rise throughout the year and economists predict slow growth in 2024, strategies like covered call funds offer stability and income potential. Investment approaches must adapt to changing market conditions, and for income investors, funds like SPYI present an opportunity to navigate the current economic landscape with consistent returns.