Even with an impressive run that’s seen the MSCI EAFE Index easily outpace the S&P 500 since the start of last year, the widely followed gauge of ex-US developed market equities sports a trailing 12-month dividend yield of 3.36%, or about triple what’s found on the domestic benchmark. Investors that want to add more income to their international journeys need not worry.
They can accomplish that objective with the NEOS MSCI EAFE High Income ETF (NIHI). NIHI, which debuted last September, answers the income call. It has a distribution rate of 13.37% and a 30-day SEC yield of 2.92%. These two metrics are well above what’s found on traditional ETFs addressing international stocks.
NIHI provides income investors with the added benefit of an easy-to-understand strategy. It writes covered calls on the iShares Core MSCI EAFE ETF (IEFA ), which is one of the largest ETFs following the MSCI EAFE Index. NIHI is a straight-forward approach to elevated international equity income and one that a broad swath of investors can understand.
NIHI Relevant Now
As noted above, NIHI isn’t old. Still, the ETF’s youth belies its relevance and utility at a time when many market observers believe there’s more upside ahead for ex-US developed market stocks.
“It’s important to acknowledge that international equities’ strength owes both to US policies and endogenous factors,” noted Mornngstar’s Dan Lefkovitz. “European markets sprang to life in early 2025, not just because of Trump-spurred defense spending but also thanks to the German election and an improved macroeconomic backdrop that was especially helpful for bank stocks. Japan’s ongoing corporate governance reforms and reflation have reinvigorated its market.”
Those factors point to the possibility of more upside ahead for MSCI EAFE member firms and that’s pertinent in discussing NIHI because while there’s capped upside as is the case with most options-based ETFs, the NEOS fund does allow for some, if not ample upside participation.
Add to that, the prevailing consensus in the investment community is that even with last year’s rally, international stocks are still attractively valued relative to domestic peers and could be on the cusp of a multi-run higher.
“It’s not just Morningstar that sees more upside in international equities. Expert forecasts compiled by Christine Benz expect higher returns for non-US equities over the next decade plus. That goes for both developed and emerging markets,” added Lefkovitz.
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