Frequently Asked Questions

We've compiled a list of topics that investors frequently request information about. Below you'll find information about our firm, our investment products, their distribution schedules, and more. If you have additional questions you'd like answered that you don't see below, please fill out the form at the bottom of the page to suggest additional topics.

ETF Distributions and Yield Information

Where can you find the monthly distribution schedule for each ETF?

The monthly distribution schedules for each ETF are on their corresponding fund pages in the “Distributions” section. We aim to update this section within 2 business days after the ex-dividend date of our ETFs each month.

What do the different dates on the monthly distribution schedule mean?

The record date, or day of record, and the ex-dividend date of an ETF are both important dates relating to the distribution or dividend payout process. These dates determine which investors will receive distributions. The other two dates in the process are the declaration date (the day the distribution or dividend payment is announced) and the payable date (the date distributions are paid to shareholders).

An ex-dividend date is the day on which a stock (or ETF) trades without the benefit of the next scheduled dividend payment. Investors who purchase shares any day before the ex-dividend date will be documented as owners of shares on the record date.
The record date refers to the date by which investors must own shares of an ETF in order to receive a its scheduled distribution.

Are the yields shown on the website net of fees and expenses?

Yes, all performance and yield information on the website is shown net of fees and expenses.

What is the difference between distribution yield, 12-month trailing yield, and 30-day SEC yield?

Understanding the differences between types of yields can be vital for investors seeking steady income streams. For more information about each, please visit: https://neosfunds.com/distribution-yield-overview/

Return of Capital (RoC) FAQs

What is a Return of Capital (RoC) and how does it relate to the NEOS ETFs?

Options-based ETFs focused on generating reliable income for investors may also provide the added benefit of return of capital distributions. While some investors may view return of capital as a negative, it may be beneficial, especially from a tax perspective.

Return of capital is a distribution made by an ETF to its investors that is classified as a return of the investor's original investment. Unlike dividends or interest income, return of capital is not considered income, and is not immediately taxable, which can be particularly useful for ETFs that use option writing strategies to generate income.

For more information about Return of Capital, we encourage you to learn more here: https://neosfunds.com/return-of-capital/

Why has Return of Capital been viewed by some investors as a negative aspect of certain investment funds?

Historically, “return of capital” may have been thought of as a negative aspect of investment funds, especially in funds that offered regularly scheduled distribution payments to their investors, but didn’t generate enough returns to fund those payments. The result… an erosion of an investors original principal and a “destructive” return of capital.

The experienced portfolio management team behind the NEOS ETFs are pioneers in the options-based ETF space and they aim to combat "destructive" Return of Capital distributions, specifically in the NEOS S&P 500 High Income ETF (SPYI).

How does SPYI aim to utilize Return of Capital for its tax benefits, but avoid its potentially negative aspects?

The experienced portfolio management team behind SPYI aim to find gains in SPYI’s portfolio whether that be from the call option strategy or the long equity positions, that they can marry with a historical loss (enter tax loss harvesting) in order to classify a portion of SPYI’s monthly distributions as a “return of capital”.

A unique element of the ETF product structure is that portfolio losses can be indefinitely carried forward, and used at opportune times to offset gains either from the option portfolio or equity portfolio in SPYI’s case.

SPYI aims to capture a portion of the upside appreciation in the S&P 500 index so that an investors principal grows and therefore they’re not actually receiving their original investment back, but rather a tax-efficient way to seek monthly income, with long term capital appreciation potential.

How can you learn about how Return of Capital distributions pertain to your specific tax situation?

The yearly distribution tax classifications for NEOS ETFs are reported via a 1099 form, making it a convenient and consolidated way to view the distribution classifications. It’s always important to consult your tax expert because every individual’s situation is unique.

About NEOS Investments

What is the signifance behind the "NEOS" name?

NEOS stands for Next Evolution Options Strategies. To this point, though there has been a proliferation of options-based ETF strategies brought to market, the vast majority provide only a one-dimensional solution such as income generation or downside protection, and we believe investors want and deserve more.

That’s why we’ve brought together a global team of experts who collectively bring decades of experience, both individually and as colleagues working together at several previous firms to offer our Next Evolution Options Strategies.

How can investors purchase shares of NEOS ETFs?

NEOS ETFs aim to empower investors with portfolio building blocks to provide high income, tax efficiency, and diversification through data-driven options-based ETFs. Our ETFs can be purchased at most online brokerages or with access to U.S. stock exchanges. We always recommend speaking with a trusted financial professional to discuss how our ETFs may fit within your investment goals and overall objectives.

Have additional questions? Let us know.

Investors should carefully consider the investment objectives, risks, charges and expenses of Exchange Traded Funds (ETFs) before investing. To obtain an ETF's prospectus containing this and other important information, please call (866) 498-5677 or view/download a prospectus here: SPYI | QQQI | BNDI | CSHI. Please read the prospectus carefully before you invest.

An investment in NEOS ETFs involve risk, including possible loss of principal. The equity securities purchased by the Funds may involve large price swings and potential for loss.

The use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include (i) the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations; (ii) risk of mispricing or improper valuation; and (iii) the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Derivative prices are highly volatile and may fluctuate substantially during a short period of time. The use of leverage by the Fund, such as borrowing money to purchase securities or the use of options, will cause the Fund to incur additional expenses and magnify the Fund’s gains or losses. The earnings and prospects of small and medium sized companies are more volatile than larger companies and may experience higher failure rates than larger companies. Small and medium sized companies normally have a lower trading volume than larger companies, which may tend to make their market price fall more disproportionately than larger companies in response to selling pressures and may have limited markets, product lines, or financial resources and lack management experience. The funds are new with a limited operating history.

The information on this website does not constitute investment advice or a recommendation of any products, strategies, or services. Investors should consult with a financial professional regarding their individual circumstances before making investment decisions. NEOS Funds or its affiliates, nor Foreside Fund Services, LLC, or its affiliates accept any responsibility for loss arising from the use of the information contained herein.

NEOS ETFs are distributed by Foreside Fund Services, LLC.

Definitions:

Option: Options are financial derivatives that give buyers the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price and date.

Distribution Yield: The annual yield an investor would receive if the most recent fund distribution remained the same going forward. The distribution yield represents a single distribution from the Fund and is not a representation of the Fund's total return. The distribution yield is calculated by multiplying the most recent distribution by 12 in order to annualize it, and then dividing by the Fund's NAV.

30-day SEC Yield: A calculation based on a formula mandated by the Securities and Exchange Commission (SEC) that calculates a fund's hypothetical annualized income, as a percentage of its assets. A security's income, for the purposes of this calculation, is based on the current market yield to maturity (in the case of bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30-day period. This hypothetical income will differ (at times, significantly) from the fund's actual experience; as a result, income distributions from the fund may be higher or lower than implied by the SEC yield.

Tax Loss Harvesting: The timely selling of securities at a loss in order to offset the amount of capital gains tax due on the sale of other securities at a profit.