IWMI ETF

The NEOS Russell 2000 High Income ETF was only launched in June 2024 with the goal of providing high current income through the sale of call options. A high current distribution rate has helped IWMI offset net asset value erosion and outperform the iShares Russell 2000 ETF over the past six months. The main appeal of selling call options is the high current income which cushions losses during market downturns and results in outperformance during sideways markets.

The Fed's slightly hawkish 2025 rate outlook makes these safer ETFs a hedge against downturns and a play on strong fundamentals.

IWMI enhances yield through an options strategy, offering a 14.8% distribution rate by leveraging Russell 2000 Index volatility. IWMI employs covered call writing, generating income from option premiums while capping upside potential, making it suitable for income-focused investors. Since its inception, IWMI delivered 11.4% ROI, underperforming the Russell 2000 Index tracker due to capped gains, but offers steady income in flat or moderately bullish markets.

Small-cap stocks appear favorably positioned in a declining rate and soft landing environment. For advisors and investors wanting to harness the potential in small-caps looking ahead, the NEOS Russell 2000 High Income ETF (IWMI) is worth consideration.

IWMI ETF combines small-cap stock exposure with an active options strategy, offering tax-efficient monthly income yielding 14.82%. Small-cap stocks are poised for a comeback: IWMI positions itself to capitalize on potential shifts in market leadership as macroeconomic factors favor value-oriented, smaller companies. IWMI aims to enhance risk-adjusted returns, providing a strategic income option for investors seeking stability and upside potential with less volatility.

VettaFi's Head of Research Todd Rosenbluth discussed the NEOS Russell 2000 High Income ETF (IWMI) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life.” For more news, information, and analysis, visit the Tax Efficient Income Channel.

The Fed's aggressive September rate cut could prove a boon to small-cap businesses in the months ahead. For those advisors and investors looking to expand their allocations, the NEOS Russell 2000 High Income ETF (IWMI) is worth consideration.

Investors continue adding small-cap exposures to their portfolios ahead of potential interest rate cuts in September. Those investors looking to harness opportunities in these companies with an eye for income would do well to consider the NEOS Russell 2000 High Income ETF (IWMI).