IAUI vs KGLD
Two ways to turn gold into a monthly paycheck — NEOS's gold income ETF vs Kurv's — on yield, how much gold upside each keeps, tax treatment, risk, and our scores.
Both funds bolt an options-income overlay onto gold exposure and pay around 13% annually, monthly. The split: IAUI (NEOS) is cheaper, larger, less volatile and uses a Section 1256 options structure with a modest tax edge — but it caps more of gold's upside. KGLD (Kurv) captured noticeably more of gold's price rise and posts a better risk-adjusted return, at the cost of higher volatility, a deeper drawdown, and a smaller, younger fund. As of mid-2026 our model rates both WATCH, with IAUI a touch ahead.
Neither is flagged for NAV erosion — a real point in their favour versus most high-yield option funds — but both are young (launched in 2025) and both distribute mostly as return of capital or ordinary income, so the after-tax yield is lower than the headline and account placement matters.
“Edge” marks the more favourable fund on that metric only — not an overall recommendation. Returns and rates are period-dependent; both funds may have launched at different times.
The differences that actually matter
1. Same idea, two structures
Both funds answer the same question — how do you earn income from gold, which pays none on its own — by holding gold exposure and selling options against it for a monthly distribution. The build differs. IAUI (NEOS) writes covered calls on gold ETPs using FLEX options that qualify for Section 1256 tax treatment. KGLD (Kurv) runs a synthetic long (long call plus short put) with an active options overlay that can include uncovered legs. Same destination — a ~13% monthly payout on gold — by two different roads, and the road determines the risk and the tax.
2. Income — a dead heat on the headline
On the number most people compare, these funds are tied: both target roughly a 13% annualised distribution, paid monthly. So the yield isn’t the decision. The real fork is what you give up to get it — IAUI caps more of gold’s upside in exchange for a steadier ride, while KGLD’s structure lets more of gold’s price move through to you.
3. NAV trajectory — both intact, but one captured more gold
Here’s the differentiator, and it’s a refreshing one for high-yield funds: neither IAUI nor KGLD is flagged for NAV erosion. The split is in where their total return came from. Of IAUI’s since-inception cash return, the large majority came from distributions and only a small slice from share-price appreciation — its covered calls capped most of gold’s rally. KGLD, by contrast, drew a much bigger share of its return from price appreciation, meaning its synthetic-long structure kept more of gold’s climb while still layering income on top. In a rising-gold environment, that’s KGLD’s case in a sentence: more participation, not just more yield. The honest caveat: both launched in 2025, so these are short, single-regime track records read into a strong gold market — not multi-cycle evidence.
4. Risk and stability
IAUI is the calmer fund: lower realised volatility, a shallower maximum drawdown, a larger asset base, and a lower fee. KGLD posts a better risk-adjusted return (a higher Sharpe ratio) because it captured more upside — but it does so with higher volatility, a deeper drawdown, and the added risk of uncovered option legs, on a much smaller pool of assets. We rate both High risk, since gold itself is volatile and an options overlay doesn’t remove that.
Which one fits you?
Lean IAUI if you want the lower-cost, lower-volatility, larger gold-income fund and you value a modest Section 1256 tax edge and a steadier ride over maximum gold participation.
Lean KGLD if you want more of gold’s actual price move to reach you, you’re comfortable with higher volatility and a deeper drawdown, and a smaller, newer fund with a return-of-capital distribution profile doesn’t deter you.
Either way: both are young funds read into a single strong gold market, both pay mostly return of capital or ordinary income, and both trade some of gold’s upside for the monthly check. Size the position as a gold-income sleeve, mind the account placement for tax, and watch the NAV behaviour as they season — which is what our full reports track.
IAUI vs KGLD: FAQ
Is IAUI or KGLD better?
It depends on what you want from gold. IAUI (NEOS Gold High Income) is the cheaper, larger, lower-volatility fund with a modest tax edge, but it gives up more of gold's upside. KGLD (Kurv Gold Enhanced Income) captured more of gold's price appreciation and has a better Sharpe ratio, but it's more volatile, drew down deeper, and is much smaller. Our model scores them close — both WATCH, IAUI marginally higher.
Does IAUI or KGLD pay a higher yield?
They're essentially tied — both run around a 13% annualised distribution rate, paid monthly, as of mid-2026. The difference between these funds isn't the headline yield; it's how much gold upside each keeps and how the distributions are taxed.
Are IAUI and KGLD distributions taxed the same way?
Not quite. IAUI uses Section 1256 (FLEX) options, so a portion of options gains can qualify for the 60/40 long-term/short-term blend — a modest tax edge. KGLD's distributions have been overwhelmingly return of capital (around 96% recently), which defers tax and reduces your cost basis rather than being taxed as income now. Both carry an ordinary-income headline treatment, so both are best understood after tax, not on the stated rate.
Is KGLD riskier than IAUI?
Yes. KGLD runs higher realised volatility and a deeper maximum drawdown than IAUI, partly because its synthetic long-plus-options structure can include uncovered option legs. IAUI's covered-call approach on gold ETPs is the steadier of the two. We rate both High risk given gold's own volatility, but KGLD is the more aggressive.
Why do IAUI and KGLD lag the price of gold?
Because both sell call options against their gold exposure to generate the income, which caps how much of a gold rally they capture. That's the core trade-off of any covered-call income fund: you swap some upside for a high current payout. KGLD's structure kept more of gold's rise than IAUI's, but both will trail physical gold in a strong rally.
Can I hold both IAUI and KGLD?
You can, but they're close substitutes — same asset, same covered-call-on-gold idea, near-identical yields. Holding both mostly doubles down on gold-income exposure rather than diversifying. The more meaningful choice is which structure you prefer: IAUI's cheaper, steadier, Section-1256 build or KGLD's higher-participation, higher-volatility one.
Want the full picture on each fund — distribution sourcing, the 19a-1 read, NAV-erosion history, holdings and our running commentary?
Open the IAUI report → Open the KGLD report →