With the S&P 500 up 9.84% year-to-date and seemingly hitting all-time highs on almost daily basis, it’s understandable that many market participants aren’t paying much attention to the index’s dividend proposition — or lack thereof.
The benchmark domestic equity gauge yields around 1.1%, with the benefit of rounding to the upside — a multi-decade low for the S&P 500’s dividend yield. Compounding that issue for equity income investors, 2025 marked the fifth consecutive year in which members of the index spent more on repurchases than on dividends.
Thanks to the NEOS Boosted S&P 500 High Income ETF (XSPI), advisors and investors have a tool to generate higher levels of S&P 500 income. The options-based strategy debuted in February. It delivers on the promise of boosted S&P 500 income, as highlighted by the ETF’s distribution rate of 16.57% — firmly within the issuer’s targeted range of 15% to 18%.
XSPI X-Ray
XSPI holds the S&P 500 stocks and leverages an options overlay to boost its income profile. Fortunately for advisors and investors, the rookie ETF income strategy isn’t complex.
“Boosted market exposure is achieved by buying index call options and selling index put options at generally similar strike prices, seeking enhanced return participation, up to 150% of notional portfolio exposure,” according to NEOS.
The newly minted, elegantly designed XSPI offers the potential for some upside participation when the S&P 500 is rallying, as is the case in the current environment, while delivering income in tax-efficient fashion.
“XSPI seeks boosted tax efficient monthly income through a data-driven call option overlay, while aiming to [maintain] upside potential by laddering call options out of the money and not writing calls on the entire portfolio,” added NEOS.
Since inception, XSPI has notched total returns of 7.13%, confirming it offers pathways to upside when the S&P 500 grinds higher. That attribute sets it apart, because many high-yield options income ETFs force investors to choose between income and upside capture.
NEOS’s broader suite of boosted ETFs also includes the NEOS Boosted Nasdaq-100 High Income ETF (XQQI) and the NEOS Boosted Bitcoin High Income ETF (XBCI).
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