The 12% Yield Gold Income ETF That Nobody Knows About

"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."

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.

Read at 24/7 Wall St.