NEOS is launching three ETFs that offer 1.5X covered call exposure of their call funds. So their covered call ETF SPYI references the S&P 500 and now the new Boosted S&P 500 High Income ETF (XSPI) will seek 1.5x the movement and yield of SPYI. For the QQQ they have had QQQI and now XQQI and Bitcoin BTCI with XBCI as the 1.5X companion.
The specific verbiage is the new funds will have 150% of the notional exposure trying to pursue higher levels of tax efficient monthly income and enhanced market participation. That leaves some wiggle room if 1.5X is not precisely linear.
The website for BTCI says it "yields" 27% so the math checks out on the performance dispersion between total return and price only. The price only versions of BTCI and 1.5 BTCI did go up through August of last year as IBIT lifted so with the right path it is possible.
SPYI and 1.5X SPYI has done a decent job of trading sideways while paying out 12% for SPYI. Trading sideways for a high yielder is a good outcome for these. The crazy high yielders generally are not capable of that. Of course, the next time the S&P 500 drops 20 or 25% covered call funds should be expected to have a pretty high downside capture. The yield might help a little but not a lot.
It's not a good assumption that the new 1.5X funds will deliver 1.5 times anything. The S&P 500 version should have a better chance because it should be less volatile than the Bitcoin funds.
Short post tonight, had to help go get Walker Fire's new brush truck. One of our guys had the idea of transferring the fire apparatus from our old, 2006 Ford onto a newer chassis. This probably saved the department $150,000 versus buying a whole new brush truck.
The information, analysis and opinions expressed herein reflect our judgment and opinions as of the date of writing and are subject to change at any time without notice. They are not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation.
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