NEOS Investments Announces First Monthly Distribution for $QQQI (14.42%)
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Insights
The announcement of the first monthly distribution for QQQI, the NEOS Nasdaq-100 High Income ETF, at a distribution yield of 14.42% is a significant event for investors. This high yield is indicative of the ETF's strategy to generate income through options-based strategies, which can offer higher yields compared to traditional equity investments. However, the sustainability of such a high distribution rate should be scrutinized, as options strategies can also carry higher risks. Investors would benefit from understanding the underlying option strategies employed by NEOS Investments to assess the associated risk-return profile.
Moreover, the timing of the distribution, shortly after the ETF's inception on January 30, 2024, may attract income-seeking investors, potentially increasing the ETF's assets under management. The impact on the stock market could be limited to the sectors and stocks within the Nasdaq-100 that the ETF is involved with and any associated options activity may influence the volatility of those securities.
From a market perspective, the introduction of a new high-income ETF like QQQI can alter the competitive landscape among income-focused investment products. A monthly distribution frequency is particularly attractive to investors who require regular income streams, such as retirees. This could lead to a shift in capital from other income-generating assets to QQQI, depending on investor perception of the ETF's performance and risk profile relative to its peers.
It's also important to consider how the ETF's performance aligns with market benchmarks and investor expectations for income and growth. The ETF's standardized performance will be a critical factor for investors to watch, as it will provide a clearer picture of how QQQI stacks up against other investment options in the market.
The distribution yield of 14.42% for QQQI may have broader economic implications, especially in the context of the current interest rate environment. If the yield offered by QQQI is significantly higher than the average yield on fixed-income securities or dividend yields from equities, it could reflect an aggressive income-generating strategy that might be more sensitive to changes in interest rates or economic downturns.
An influx of investments into high-yield ETFs like QQQI might also indicate investor sentiment towards the market's risk appetite. In a low-interest-rate environment, investors tend to search for higher yields, which could lead to a greater acceptance of risk. Conversely, a rising interest rate environment might make such high-yield strategies less appealing as safer alternatives begin to offer competitive returns.
Distribution as of February’s Declaration Date of 2/20/2024
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QQQI |
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The February distribution payable date was 2/23/2024 for shareholders of record on 2/22/2024.
QQQI Inception Date: 1/30/2024
Click here for QQQI Standardized Performance
About NEOS Investments: Founded in 2022, NEOS Investments offers ETFs that aim to deliver the next evolution of options strategies, where seeking income is the outcome. Built on decades of research and experience, NEOS ETFs aim to empower investors with portfolio building blocks that provide monthly income, tax efficiency, and diversification through data-driven options-based ETFs.
The performance data quoted above represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted above. Performance current to the most recent month-end can be obtained by visiting https://neosfunds.com or calling 866.498.5677.
The 30-Day SEC yield** for QQQI is
The Gross Expense Ratio for QQQI
*The Distribution Yield is the annual yield an investor would receive if the most recently declared distribution, which includes option income, remained the same going forward. The Distribution Rate is calculated by multiplying an ETF’s Distribution per Share by twelve (12), and dividing the resulting amount by the ETF’s most recent NAV. The Distribution Rate represents a single distribution from the ETF and does not represent its total return. Distributions are not guaranteed.
**30-day SEC Yield is calculation based on a formula mandated by the Securities and Exchange Commission (SEC) that calculates a fund's hypothetical annualized income, as a percentage of its assets. A security's income, for the purposes of this calculation, is based on the current market yield to maturity (in the case of bonds) or projected dividend yield (for stocks) of the fund's holdings over a trailing 30-day period. This hypothetical income will differ (at times, significantly) from the fund's actual experience; as a result, income distributions from the fund may be higher or lower than implied by the SEC yield.
The Nasdaq-100 Index (NDX®) defines today’s modern-day industrials—comprised of 100 of the largest and most innovative non-financial companies listed on the Nasdaq Stock Market based on market capitalization.
Investors should carefully consider the investment objectives, risks, charges and expenses of Exchange Traded Funds (ETFs) before investing. To obtain an ETF's prospectus containing this and other important information, please call (866) 498-5677 or view/download a prospectus here: QQQI Prospectus. Please read the prospectus carefully before you invest.
An investment in NEOS ETFs involves risk, including possible loss of principal. The equity securities purchased by the Funds may involve large price swings and potential for loss.
The use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include (i) the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations; (ii) risk of mispricing or improper valuation; and (iii) the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Derivative prices are highly volatile and may fluctuate substantially during a short period of time. The use of leverage by the Fund, such as borrowing money to purchase securities or the use of options, will cause the Fund to incur additional expenses and magnify the Fund’s gains or losses. The earnings and prospects of small and medium sized companies are more volatile than larger companies and may experience higher failure rates than larger companies. Small and medium sized companies normally have a lower trading volume than larger companies, which may tend to make their market price fall more disproportionately than larger companies in response to selling pressures and may have limited markets, product lines, or financial resources and lack management experience. The funds are new with a limited operating history.
The information on this website does not constitute investment advice or a recommendation of any products, strategies, or services. Investors should consult with a financial professional regarding their individual circumstances before making investment decisions. NEOS Funds or its affiliates, nor Foreside Fund Services, LLC, or its affiliates accept any responsibility for loss arising from the use of the information contained herein.
NEOS ETFs are distributed by Foreside Fund Services, LLC.
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Source: NEOS Investments
FAQ
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