NEOS Investments Launches Next Evolution Options Income ETFs


NEOS Investments today launched two new options income ETFs on the NYSE.

The Westport, Connecticut-based company unveiled the NEOS Enhanced Income Aggregate Bond ETF (BNDI) and the NEOS Enhanced Income Cash Alternative ETF (CSHI)which are part of the company’s initial range of Next Evolution income ETFs.

Both funds are actively managed and designed to help investors and advisors navigate the challenges of the current market environment while aiming to provide opportunities for monthly income generation and tax efficiency, the company said in a statement. communicated.

Both BNDI and CSHI use a put spread approach of selling short put options and buying long put options, to generate an option premium on an ongoing basis that can be distributed to shareholders in the form of income without taking excessive risk to do so, according to NEOS Investments.

BNDI is designed as an enhanced approach to the type of exposure offered by the US Aggregate Bond Index and seeks to be less sensitive to credit and duration risk via its integrated options strategy which aims to provide tax-efficient monthly income more than an investor would receive in bond interest alone.

CSHI is an innovative alternative to fixed income securities and very short-term cash in a portfolio. The fund combines exposure to short-term Treasury bills (1-3 months) with the actively managed put spread approach described above. CSHI seeks to provide an enhanced monthly income stream greater than what investors would receive by investing only in treasury bills.

“Investors need and deserve an enhanced suite of options-based ETFs to help them build more resilient core equity and income portfolios,” said Garrett Paolella, co-founder and managing partner of NEOS, in a press release. “My colleagues and I are very excited to solve today’s increasingly complex portfolio construction challenges with the deployment of these ETFs and we are excited to be able to start talking with investors. , advisors and institutions of the role of our solutions. can play in all types of portfolios.”

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