WESTPORT, co.–(BUSINESS WIRE)–NEOS Investments (“NEOS”), a global asset manager led by a highly experienced team that previously built and grew numerous options-based ETFs currently on the market, is today launching its initial ETF package future income from evolution:
NEOS S&P 500 High Income ETF ( SPYI );
NEOS Enhanced Aggregate Income Bond ETF (BNDI); AND
NEOS Alternative Cash ETF with Enhanced Income (CSHI).
All three ETFs are actively managed and designed to help investors and advisors navigate the challenges of the current market environment, while also aiming to provide opportunities for monthly income generation and tax efficiency.
NEOS Investments’ first equity solution, SPYI, aims to offer an attractive monthly distribution. The Fund’s management team uses a strategy that aims to replicate the S&P 500 Index, then implements a data-driven options overlay strategy that uses a call spread approach as opposed to the more common covered call strategy that many passive funds use to generate high monthly income, taxes. efficiency and the potential for increased equity participation in emerging markets.
BNDI and CSHI both use a put spread method, which involves selling short and buying long, with the goal of generating option premium on an ongoing basis that can be distributed to shareholders as income. without assuming great risk in doing so.
BNDI is designed as an enhanced approach to the type of exposure provided by the US Aggregate Bond Index, seeks to have less sensitivity to credit and duration risk through its integrated options strategy, which aims to provide monthly income with greater tax efficiency than an investor. receive only interest on bonds.
CSHI is an innovative alternative to short-term fixed income and cash positions in a portfolio. The fund combines exposure to short-term (1-3 month) Treasury bonds with the actively managed put spread method described above. CSHI seeks to provide an increased monthly income stream over what investors would receive from investing in treasury bonds alone.
“Investors need and deserve an expanded array of options-based ETFs to help them build more resilient equity and income portfolios,” said Garrett Paolella, Co-Founder and Managing Partner at NEOS. “Aiming to solve today’s increasingly complex portfolio construction challenges is something my colleagues and I are very excited about doing with the introduction of these ETFs, and we’re excited to start talking to investors, advisors and institutions about the role our solutions can play. play in all kinds of portfolios.”
NEOS was founded by a team of options industry pioneers who collectively bring decades of experience, both individually and as colleagues working together at a number of previous firms on some of the most successful options ETF launches of the past decade+ .
To learn more about NEOS Investments and its other product and service offerings, please visit: https://neosfunds.com/
NEOS ETFs aim to provide the next evolution of investment strategies where the pursuit of income is the outcome. Built on decades of research and experience, NEOS ETFs aim to empower the investor with portfolio building blocks to deliver high income, tax efficiency and diversification through data-driven options-based ETFs. For more information, visit https://neosfunds.com/.
Investors should carefully consider the investment objectives, risks, fees and expenses of Exchange Traded Funds (ETFs) before investing. To obtain an ETF prospectus containing this and other important information, please call (866) 498-5677 or view/download a prospectus at https://neosfunds.com. Please read the prospectus carefully before investing.
An investment in the NEOS ETF involves risk, including potential loss of principal. Equity securities purchased by the Funds may involve large price fluctuations and the potential for loss.
The use of derivative instruments involves risks different from, or perhaps greater than, the risks associated with investing directly in securities and other traditional investments. These risks include (i) the risk that the other party to a derivative transaction may not fulfill its contractual obligations; (ii) the risk of misvaluation or improper valuation; and (iii) the risk that changes in the value of the derivative may not be perfectly correlated with the underlying asset, rate or index. The prices of derivatives are very volatile and can fluctuate significantly over a short period of time. The Fund’s use of leverage, such as borrowing money to purchase securities or exercising 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 typically have lower trading volume than larger companies, which may cause their market price to fall disproportionately more than larger companies in response to selling pressures and may have limited markets, production lines or financial resources and lack of management experience. . The funds are new with a limited operating history.
Additional risks specific to BNDI CSHI
Debt issuers and other parties may be unable or unwilling to make timely interest and/or principal payments when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also adversely affect the value of the Fund’s investment in that issuer. The Fund’s income may fall when yields fall. This decline may occur because the Fund may then invest in lower-yielding bonds as the bonds in its portfolio mature, are close to maturity or are called bonds in the Fund otherwise it must purchase additional bonds. Interest rate risk. The risk that fixed income securities will decrease in value due to rising interest rates; a fund with a longer average portfolio duration will be more sensitive to changes than a fund with a shorter average portfolio duration.
Additional risks specific to BNDI
Securities that are rated below investment grade (commonly referred to as “junk bonds,” which may include those bonds rated below “BBB-” by S&P Global Ratings and Fitch Ratings, Inc. (“Fitch”) or below “Baa3” by Moody’s Investors Service, Inc. (“Moody’s”)), or are unrated, may be considered speculative, may involve greater levels of risk than higher rated securities of similar maturity, and they may be more likely to default.
S&P 500 Index: The Standard and Poor’s 500, or simply the S&P 500, is a stock market index that tracks the stock performance of 500 large companies listed on stock exchanges in the United States.
Bloomberg Barclays US Aggregate Bond Index: The Bloomberg US Aggregate Bond Index (the “Index”) is designed to measure the performance of the U.S. dollar investment grade bond market, which includes investment grade (must be Baa3/BBB- or higher by using the average rating of Moody’s Investors Service Inc., Standard & Poor’s Financial Services, LLC and Fitch Inc.) government bonds, investment grade corporate bonds, mortgage pass through securities, commercial backed securities from mortgages and other asset-backed securities that are publicly available for sale in the United States. Securities in the Index must have at least 1 year remaining to maturity and must have an outstanding par value of $300 million or more. Asset-backed securities must have a minimum deal size of $500 million and a minimum tranche size of $25 million. For commercial mortgage-backed securities, the total original transaction must have a minimum deal size of $500 million and a minimum tranche size of $25 million; the total size of outstanding transactions must be at least $300 million to remain in the Index. In addition, the securities must be US dollar denominated, fixed rate, non-convertible and taxable. The index is weighted by market capitalization.
Covered call: Call options are financial contracts that give the option buyer the right, but not the obligation, to buy a stock, bond, commodity or other asset or instrument at a specified price within a specified time period. The term covered call refers to a financial transaction in which the investor selling the call options owns an equivalent amount of the underlying security. To implement this, an investor who holds a long position in an asset then writes (sells) call options on the same asset to generate an income stream. The investor’s long position in the asset is cover because it means the seller can deliver the stock if the buyer of the call option chooses to exercise.
Call propagation: A call spread is an option spread strategy that is created when an equal number of call options are bought and sold simultaneously.
Set the Spread: A put (or “put”) option is a contract that gives the option buyer the right, but not the obligation, to sell – or sell short – a specified amount of an underlying security at a predetermined price within a certain time frame. A put spread is an option spread strategy that is created when an equal number of put options are simultaneously bought and sold.
NEOS ETFs are distributed by Foreside Financial Services, LLC.