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