Hello, Thanks for signing up for MarketBeat Daily Ratings—we’re excited to have you on board. Every weekday, you’ll get a curated summary of new “Buy” and “Sell” ratings from Wall Street’s top-rated analysts, the latest stock news, and bonus investing content—all delivered straight to your inbox. You’re just two quick steps away from completing your sign-up: 1. Make sure our emails go to your inbox Gmail users:
Mobile: Tap the three dots (…) in the top right and select Move to Inbox or Move to Primary
Desktop: Click the folder icon at the top and select Move to Inbox or Primary Apple Mail users:
Tap our email address at the top (next to From: on mobile), then select Add to VIP Other providers:
Reply to this message and add newsletters@analystratings.net to your contacts 2. Confirm your subscription Click this link to confirm your subscription. This verifies your account and ensures you receive your newsletters without interruption instead of getting stuck in your spam filter. Confirm your subscription here. After you confirm, feel free to download our popular free report, "7 Stocks to Buy and Hold Forever" with this link. Thanks again for subscribing—we look forward to being part of your investing journey. 
Matthew Paulson
Founder and CEO, MarketBeat. P.S. If you didn’t mean to subscribe, no problem—you can unsubscribe here.
Further Reading from MarketBeat Replace Your Fixed Income With This Dividend ETFWritten by Jordan Chussler. Published 9/24/2025. 
Key Points - With the Federal Reserve slashing its benchmark interest rate for the first time since 2024, yields on fixed income are heading lower.
- For income-focused investors, dividend ETFs can help offset losses from less productive debt securities like Treasury bills and CDs.
- Because these funds often use options strategies to produce higher yields, it is important to be aware of the tax treatment for their dividends.
On Sept. 17, the Federal Reserve cut its effective federal funds rate (EFFR) for the first time since 2024, delivering precisely what Wall Street had been anticipating. Unsurprisingly, the market has risen 1.42% since that announcement. Debt securities are becoming less attractive for income investors who had enjoyed above-average yields on fixed-income products since the pandemic's onset. If the Fed continues lowering the EFFR through year's end—as it did last September through December—many investors will likely turn to equities to compensate for lost yield. Of course, much can change between now and year-end. Market uncertainty persists, and inflation—once nearing the Fed's 2% target—is creeping higher again. A rate cut at next month's FOMC meeting is not guaranteed. Still, markets have priced in nearly a 90% chance of another cut, according to the CME Group's FedWatch Tool. For investors seeking better yields, the NEOS S&P 500 High Income ETF (BATS: SPYI) merits attention. SPYI's Eye-Catching Monthly Dividend The era of exceptionally high yields on near-zero-risk investments has passed. In May 2022, Series I savings bonds yielded 9.62%; today, they pay just 3.98%. While that still beats the 2.06% on one-year municipal bonds, I bonds are almost certain to see a lower rate when they reset after Oct. 31. Enter SPYI. This actively managed ETF charges a reasonable 0.68% expense ratio and aims to deliver "high monthly income in a tax-efficient manner with the potential for upside appreciation in rising markets." That potential for upside is key. Let's focus on the dividend. SPYI currently offers an annualized yield of 11.67% (about $6.15 per share), paid monthly. NEOS, the fund's manager, employs an S&P 500 options strategy that sells covered calls while buying out-of-the-money calls to capture more upside than comparable dividend ETFs like the JPMorgan Equity Premium Income ETF (NYSEARCA: JEPI). By contrast, JEPI typically sells near-the-money calls, which can cap its gains. The results speak for themselves. Since its launch on Aug. 30, 2022, SPYI has returned 8.46% while delivering an average annual yield between 10% and 11%. From its all-time low on April 4, the fund has rallied nearly 23%. A Deep Portfolio With Growth-Focused Holdings Beyond their options overlays, SPYI and JEPI also differ in portfolio construction. JEPI's top holdings include a mix of cyclicals such as financials and defensive names like consumer staples. SPYI, by contrast, mirrors the sector weights of the S&P 500 more closely, with its top 10 positions dominated by technology, consumer discretionary, and communication services giants: NVIDIA (NASDAQ: NVDA), Amazon (NASDAQ: AMZN), and Meta Platforms (NASDAQ: META) occupy three of the five largest allocations. By industry, SPYI allocates roughly 27% to semiconductors, 22% to software, 17% to media, and 16% to specialty retail. The ETF holds over 500 stocks—compared with around 125 in JEPI—providing broader diversification alongside its covered-call overlay. Understanding SPYI's Tax Treatment Before investing in SPYI, it's important to understand its tax treatment. Some high-yield ETFs classify most distributions as return of capital (ROC), which is taxed at ordinary income rates—up to 37%. SPYI's dividends benefit from a tax-efficient structure under IRS Section 1256: 60% of gains are subject to the lower long-term capital gains rate, while 40% are taxed at ordinary income rates. In contrast, most of JEPI's distributions are treated as ordinary income—another point in SPYI's favor.
| 
No comments:
Post a Comment