The NEOS Nasdaq-100 High Income ETF is the formal name for the fund Bryan Perry pitches as his “safe 14.1% income fund,” and the formal name is worth sitting with, because every word in it is doing work. “Nasdaq-100” tells you the equity exposure. “High Income” tells you the goal. And the NEOS name tells you the manager, the part of the story that actually distinguishes this fund from the older covered-call products it was built to beat.
The Manager Behind the Ticker
NEOS Investments launched the fund on January 29, 2024, with a specific design brief: build a covered-call fund that does not simply repeat the mistakes of the first generation. The first generation, the Global X Nasdaq-100 Covered Call ETF, sells at-the-money calls on a fixed monthly schedule, a mechanical approach that maximizes income but hands away almost all upside the moment the index ticks higher. NEOS’s team runs a more active program, using call spreads and other structures, choosing strikes and expirations with some judgment instead of a fixed formula.
The result has been measurable. Since launch, QQQI has posted a meaningfully better total return than the passive fund it was built to improve on, and in some down months it has nearly kept pace with the Nasdaq-100 itself. The fund won etf.com’s “best new active ETF” award for 2024, an independent nod that the design is more than marketing. That distinction is the single strongest argument in Perry’s favor, and it is worth giving him credit for.
What the Strategy Produces
The strategy produces a monthly distribution that currently advertises around 14.1%, but the honest label for that number is a distribution yield, not a return. QQQI collects option premium by selling calls against its Nasdaq-100 exposure, then pays most of that premium out to shareholders. The fund’s own holdings yield little on their own, so nearly all of the income you see is manufactured by the options program.
That manufacturing has a cost. In exchange for the premium, the fund sells away its upside beyond the call strike, and it keeps every bit of the downside. A good month for the index is a partially missed month for QQQI; a bad month for the index is a fully felt month. Our covered call ETF explainer goes through the mechanics with the numbers attached.
The Track Record Under the Pitch
The promotion’s own performance claim is the weakest link. It states that “over the past 12 months, the share price of this fund has grown 19.88%, including dividends.” Our teardown ran the actual trailing twelve-month total return and found about 9.3%, not 19.88%. The share price fell over the window, and the distributions made up only part of the gap. Over the same stretch, the Nasdaq-100 returned about 12.6%, and the older covered-call fund returned about 16.7%, which undercuts the pitch’s claim that QQQI is strictly better.
None of that makes QQQI a bad fund. It makes the pitch’s numbers stale, which is the difference between judging the product and judging the ad. The expense ratio is 0.68%, reasonable for an actively managed options fund.
The Honest Verdict
QQQI, the NEOS Nasdaq-100 High Income ETF, is a well-run example of a category that most income investors misunderstand. It is a legitimate upgrade over the passive covered-call funds that came before it, and Perry’s instinct to prefer the better-managed product is sound. What it is not is a “safe” alternative to a CD, and the 14.1% figure is not a guaranteed return. If you want current monthly income and accept full equity risk and a total return that trails the index over time, QQQI is a defensible holding. If you want safety, the certificate of deposit is still the honest answer, a point we make in our capital preservation piece. For the fund’s place in a monthly income calendar, see our monthly dividend ETF explainer.
The Fine Print on the Payouts
The payout mechanics come with tax fine print that the pitch never surfaces. Because QQQI’s distributions are built from option premium rather than qualified dividends, the tax treatment differs from what an investor in a plain dividend fund expects. Some of what the fund pays each year can be classified as return of capital, which reduces your cost basis rather than showing up as ordinary income immediately.
Return of capital is not a red flag by itself; it is a normal feature of covered-call funds in markets where the price is falling or flat. But it matters for anyone holding the fund in a taxable account, because it quietly defers a tax event into the future, when the reduced basis turns into a larger capital gain at sale. The practical takeaway is simple: know where the money is going to land on your 1099, and if you hold QQQI outside a retirement account, expect the year-end statement to be more involved than a dividend fund’s. The yield is real, but the tax bill is part of the package.
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