The ETF market is not slowing down, with income strategies one of the hottest growth sectors. NEOS Investments has added itself to the list of issuers racing after investor appetite for yield with the introduction of the NEOS MSCI EAFE High Income ETF (NYSE:NIHI), which started trading on Wednesday.
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How It Works
NIHI has an expense ratio of 0.68% and pursues an active strategy in providing income. The approach focuses on investing in ETFs that mirror the MSCI EAFE Investable Market Index, a wide range of developed-market stocks outside the U.S. and Canada. Constituents of the benchmark range from large, mid, to small caps, with industrials and financials having strong sectors. Market capitalizations in the index range from about $50 million to $325 billion.
In addition to this diversified foundation, NIHI has a call-writing strategy, writing options on the index to boost yield. This overlay of options in conjunction with dividend exposure is designed to provide a high monthly return. NEOS contends that its active management can better balance income and risk than under a rules-based system.
Who Might Benefit
For retirees or those nearing retirement, NIHI's income-first design could serve as a ballast against volatility while still offering international diversification. Younger investors, meanwhile, may find the blend of steady distributions and tax efficiency appealing as they build long-term portfolios.
With increasing competition in the saturated income ETF space, NIHI is NEOS’s newest attempt at separating itself with active, options-based strategies. Entering the home stretch of 2025, the fund’s combination of yield creation and tax sensitivity may attract income hunters with eyes on the horizon.
The fund arrives when investors are weighing market uncertainty against year-end tax concerns. NIHI is marketed as a tool that not only provides monthly returns but also attempts to navigate tax exposure—two themes strongly in focus as the calendar year comes to a close.
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