PEPS vs SPYI

PEPSBParametric Equity Plus ETF

SPYIANeos S&P 500(R) High Income ETF

In short

PEPS Active management at index-fund pricing. PEPS holds a U.S. large-cap base, then writes S&P 500 calls against offsetting long exposure: a beta-neutral overlay built to add return rather than swap upside for income.

SPYI SPYI owns the S&P 500 and layers an SPX call spread on top: sell calls for premium, buy further-out calls to leave some room to climb. Monthly payouts, index-option tax treatment, running since 2022.

Stated mandate

PEPS The Fund seeks long-term capital appreciation. It is actively managed, using a U.S. large-cap equity base and beta-neutral call overwriting on the S&P 500 with offsetting long exposure to seek incremental total return.

SPYI The fund seeks high monthly income through investments in S&P 500 constituents and a data-driven call-option strategy, while retaining potential for equity appreciation in rising markets.

Why people hold it

• PEPS 0.10% is index-fund pricing for an actively managed strategy. Even the cheap, well-regarded active peers cost more: DFAU at 0.12%, FELC at 0.18%.
• Not a covered-call fund. The sold S&P 500 calls are paired with offsetting long exposure, so the overlay seeks incremental total return instead of capping upside.
• Ordinary 1940 Act ETF wrapper, U.S. large-cap equity, distributions paid quarterly. The complexity lives in the overlay, not the tax paperwork.
• Cost is the standout: the typical active U.S. equity ETF in this group charges several times what PEPS does, and fee drag is the one input you know in advance.

• SPYI The overlay is a net-credit call spread: it sells SPX calls and buys further out-of-the-money calls, so the fund keeps some participation when the index rises.neosfunds.comsec.gov
• Income comes from SPX index options, Section 1256 contracts taxed 60% long-term / 40% short-term regardless of holding period. Managers also pursue tax loss harvesting.neosfunds.comneosfunds.com 2
• Pays monthly, and the portfolio matches the mandate closely: S&P 500 constituents plus the option overlay. A multi-billion-dollar fund that trades actively.

Worth knowing

• PEPS Launched in November 2024. The overlay has not yet run through a full market cycle, so there is limited history to judge it on.
• A small, thinly traded fund. Bid-ask spreads can run wider than a mega-cap index ETF's, which shows up most on larger orders.
• The options leg adds moving parts: short index calls lose value in a sharp rally, and the offsetting long exposure is what has to make that back.

• SPYI At 0.68%, it prices above the typical fund in its options-income group (0.60% median), and cheaper index-option income peers exist, including IVVW at 0.25% and GPIX at 0.35%.
• Neos discloses that distributions have been classified as return of capital, which hands back part of your own investment and lowers your cost basis.neosfunds.com
• Writing calls trades away part of a rally. The fund aims to capture a portion of the index's upside, not the whole move.neosfunds.comneosfunds.com 2

Full PEPS profile⁠

Full SPYI profile⁠