3 Covered Call ETFs That Actually Grow NAV

"The NEOS S&P 500 High Income ETF (SPYI) tracks the S&P 500 while actively selling out-of-the-money (OTM) call options on the index. This strategy delivers a 12.2% yield, appealing to income-focused investors. Since its inception, SPYI has grown its NAV, boasting a 15.2% total return over the past year, slightly ahead of the S&P 500's 14.8% return. Its success stems from active management, which balances premium collection with capturing market upside."

"SPYI's tax-efficient structure , using Section 1256 contracts with a 60/40 long-term/short-term tax split and tax-loss harvesting, minimizes NAV erosion by classifying some distributions as return of capital. With a 0.68% expense ratio, SPYI offers a compelling blend of income and growth. Its diversified exposure to the S&P 500 reduces risk compared to single-stock or sector-focused funds, making it ideal for investors prioritizing yield and capital preservation."

Covered-call ETFs generate income by holding stocks or assets and selling call options to collect premiums, often producing yields exceeding 10%. Strategies vary from index-level to single-stock option sales, with some funds using active management for flexibility. A central risk is NAV erosion, as distributions can exceed capital gains during volatile or bearish markets, and upside is capped. Three covered-call ETFs have achieved NAV growth while offering high yields by employing different options-selling approaches. The NEOS S&P 500 High Income ETF (SPYI) sells OTM index calls, yields 12.2%, grew NAV with a 15.2% total return last year, uses Section 1256 tax treatment and tax-loss harvesting, and charges a 0.68% expense ratio while maintaining diversified S&P 500 exposure.

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