SPYI ETF: Evaluating the High Monthly Dividend Yield

With a dividend yield of 12.22%, the NEOS S&P 500 High Income ETF (SPYI) offers an attractive monthly income stream compared to broader market averages. However, the high dividend payouts come with added risks.

As a covered call ETF, SPYI generates dividends by selling options contracts on its S&P 500 holdings. These premiums are distributed to shareholders monthly, with the next payment on October 25, 2023.

Key Factors to Consider About SPYI’s Dividend

When evaluating SPYI’s high dividend yield, here are some important points:

  • Monthly dividend payment schedule
  • Yield significantly exceeds market average
  • Not a fixed payout and can vary each month
  • Uses covered calls, a leveraged options strategy
  • Carries risks of amplified losses alongside gains

Determining if SPYI Dividend Aligns With Your Strategy

The above-average income potential makes SPYI appealing for income-focused investors. However, the volatility and uncertainty of options-based dividends requires proper due diligence beforehand.

Assessing your risk tolerance and income needs is key in deciding if SPYI has a place in your portfolio. The high yield comes with elevated downside risks that may not suit all investors.

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