QQQI vs SPYI
NEOS's two flagship high-income ETFs head to head — Nasdaq-100 vs S&P 500: yield, the Section 1256 tax edge, NAV, risk, and our independent scores.
Same issuer, same tax-efficient overlay, different index. QQQI (Nasdaq-100) pays more — roughly 13.8% versus about 11.8% for SPYI — but it's the higher-risk fund, rated High risk on our model with more volatility and a deeper drawdown. SPYI (S&P 500) is the calmer holding at Medium risk for a smaller payout. We score them nearly level (SPYI a shade ahead), both WATCH — a genuine decision, not a clear winner. Neither currently carries our NAV-erosion flag.
Both share NEOS's signature edge: a Section 1256 (60/40) options overlay plus heavy return-of-capital classification, which makes their distributions materially more tax-efficient than ordinary-income covered-call peers like JEPI or JEPQ. That's a real reason these two can be considered for a taxable account — though ROC still erodes cost basis, so it's tax deferral, not tax-free income.
“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 engine and tax wrapper, different index
Both funds are the same NEOS machine pointed at different markets: an actively managed index portfolio with a data-driven options overlay, structured for Section 1256 (60/40) tax treatment. QQQI writes against the Nasdaq-100; SPYI against the S&P 500. Because the strategy and tax wrapper are shared, the decision between them is mostly a question of which index’s risk-and-return profile you want — not which manager or mechanic is better.
2. Income and the tax catch — for once, in the funds’ favour
QQQI’s distribution rate is higher, funded by the richer premium available on the more volatile Nasdaq. The feature both share is the tax design: each classifies the large majority of its distribution as return of capital, and combined with Section 1256 treatment that makes the after-tax yield meaningfully better than an ordinary-income peer. The catch is the same one ROC always carries — it defers tax and erodes your cost basis rather than eliminating the liability, so the benefit is real but finite.
3. NAV trajectory — both holding, so far
Unlike the legacy at-the-money buy-write funds, neither QQQI nor SPYI currently carries our NAV-erosion flag. SPYI has the longer record to judge: a real share of its since-inception return came from price appreciation rather than distributions alone. QQQI is the younger fund, with less history behind its result — a soft caveat rather than a red flag. The active overlay (including optional upside calls) is designed precisely to avoid the capital decay that plagues passive buy-write strategies.
4. Risk and stability
SPYI is the steadier sibling on every stability measure — lower realised volatility, a shallower drawdown, and a Medium risk rating against QQQI’s High. That’s the S&P 500’s broader, less tech-concentrated base showing through. QQQI asks you to accept Nasdaq-grade swings in exchange for the bigger monthly check.
Which one fits you?
Lean SPYI if you want broad, lower-volatility U.S. equity income, you value stability over the highest possible payout, and a Medium-risk holding fits your plan.
Lean QQQI if you want the larger monthly distribution and you’re comfortable with the Nasdaq-100’s volatility and concentration in exchange for it.
Either way: the Section 1256 plus return-of-capital structure is the reason these two can be considered for a taxable account, not just an IRA — but still judge both on total return and NAV behaviour, not the headline distribution rate, which is what our full reports track over time.
QQQI vs SPYI: FAQ
Is QQQI or SPYI better?
They're nearly level on our model — both WATCH, with SPYI scoring a fraction higher on stability. They're built the same way by the same issuer (NEOS) and differ mainly by index: QQQI tracks the Nasdaq-100 and pays more but carries more risk, while SPYI tracks the S&P 500 and is calmer. Choose QQQI for more income and a growth tilt; choose SPYI for a steadier ride.
Does QQQI pay a higher dividend than SPYI?
Yes. As of mid-2026 QQQI distributed at roughly a 13.8% annualised rate versus about 11.8% for SPYI, and both pay monthly. The higher QQQI payout reflects richer option premium on the more volatile Nasdaq-100. Rates float with market conditions, so neither is fixed.
How are QQQI and SPYI distributions taxed?
Both are structured for Section 1256 (60/40) tax treatment and classify a large share of distributions — roughly 96% to 99% — as return of capital. That combination makes them more tax-efficient than ordinary-income covered-call funds: the 60/40 split softens the rate, and ROC defers tax. The catch is that return of capital lowers your cost basis over time, so it's deferral rather than permanent avoidance.
Is QQQI riskier than SPYI?
Yes. QQQI rates High risk on our model with higher realised volatility (about 18% versus roughly 13% for SPYI) and a deeper maximum drawdown, reflecting the Nasdaq-100's tech concentration. SPYI rates Medium risk. QQQI asks you to accept bigger swings in exchange for the larger payout.
Can I hold both QQQI and SPYI?
Yes — because they track different indices (Nasdaq-100 vs S&P 500), they're complementary rather than redundant, and many income investors hold both. Just remember they share the same NEOS mechanics, Section 1256 treatment, and return-of-capital-heavy distributions, so holding both concentrates those same structural traits.
Want the full picture on each fund — distribution sourcing, the 19a-1 read, NAV-erosion history, holdings and our running commentary?
Open the QQQI report → Open the SPYI report →