The 12% Yield Gold Income ETF That Nobody Knows About

NEOS Gold High Income ETF (IAUI) addresses gold's lack of income by implementing a covered call strategy layered on gold exposure. The fund allocates approximately 63% to U.S. Treasury Bills used as collateral for synthetic gold exposure through options, 24% to Goldman Sachs Physical Gold ETF, with the remainder in the options overlay. Treasury Bills generate short-term interest alongside options income, contributing to the 12.2% annualized monthly distribution yield. The strategy employs dynamic call writing adjusted by market conditions rather than fixed monthly mechanics. However, this income generation comes with a cost: since inception in June 2025, IAUI returned 35% compared to GLD's 66%, demonstrating the opportunity cost when gold rallies significantly and sold calls limit upside participation.

"IAUI does not simply buy gold and sell calls against it. The structure is more capital-efficient than that. The fund holds roughly 63% in U.S. Treasury Bills, uses those as collateral to gain synthetic gold exposure through options, and holds about 24% in the Goldman Sachs Physical Gold ETF. The remaining slice is the active options overlay itself."

"NEOS describes the approach as a data-driven, dynamic call strategy, meaning they are not mechanically writing calls at a fixed strike every month. They adjust coverage and strike selection based on market conditions, which gives the fund more flexibility than a fully covered, static overlay would allow. The result: a 12.2% annualized distribution yield, paid monthly."

"Since IAUI's inception in June 2025, the fund has returned 35% on price alone, rising from $45.42 to $61.34. Over that same period, GLD returned 66%. The gap reflects exactly what a covered call strategy costs you: when gold rallies hard, the calls you sold get exercised and you miss the upside above the strike."

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