XYLD - SPYI: I Love Covered Calls Especially When The Upside Isn't Capped
2024-06-24 09:00:00 ET
Summary
- Neos S&P 500(R) High Income ETF offers unique covered call strategy for income generation.
- SPYI has outperformed similar ETFs, JEPI and XYLD, in terms of yield and total return over the past year.
- SPYI's AUM has increased significantly, indicating growing interest in its income-generating strategy and potential for future growth.
When it comes to investing, there is no shortage of investment vehicles. There seems to be an ETF that covers any investment thesis, sector, and strategy. There are many ways to meet this objective when it comes to income investing. Investors can allocate capital to individual equities, take advantage of the risk-free rate of return due to the high-yield environment, invest in closed-end funds that focus on private credit and corporate debt, invest in business development corporations or REITs, and invest in ETFs that focus on specific indexes or option strategies to name a few. There is a wide range of investments available to the investment community. While I am a hybrid investor, as I have a portion of my portfolio positioned toward capital appreciation and another to income generation, I still utilize a covered call strategy to generate income from positions such as Tesla ( TSLA ) and Palantir (PLTR). I even write covered call contracts on REITs such as Omega Healthcare ( OHI ) and SL Green Realty (SLG). I look at owning shares in a company similar to owning a rental property. Regardless of if the position pays a dividend, I want to write a contract against my shares to generate income the same way a landlord would want a tenant in their property paying them rent. The Neos S&P 500((R)) High Income ETF ( SPYI ) is becoming one of my preferred income-generating vehicles because the management team invests in the companies I want to own and utilizes an interesting call option strategy that doesn't cap the entire upside of the underlying portfolio. While SPYI is relatively new, it's amassed $1.49 billion in assets under management ((AUM)) and produced a track record of paying double-digit yields over the trailing twelve months ((TTM))....
SPYI: I Love Covered Calls, Especially When The Upside Isn't Capped