PEPS vs XSPI

PEPSBParametric Equity Plus ETF

XSPICNEOS Boosted S&P 500 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.

XSPI The leveraged cousin in the NEOS income lineup: S&P 500 stocks plus a laddered call overlay, boosted with synthetic long exposure to roughly 150% notional, in pursuit of a 15% annualized distribution paid monthly.

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.

XSPI The Fund seeks high monthly income in a tax-efficient manner, with potential for enhanced 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.

• XSPI The boost is mechanical: buy index calls and sell index puts at similar strikes to reach about 150% notional exposure, then write additional SPX calls on top. More premium collected, more equity exposure working.neosfunds.comsec.gov
• Calls are laddered out of the money and not written across the whole portfolio, so part of a rally stays open rather than being capped away.neosfunds.com
• Built on the same S&P 500 options framework as NEOS's flagship SPYI, using index options and distributions the issuer has classified as return of capital, which defers tax and trims cost basis instead of hitting as ordinary income.neosfunds.com
• Income is designed to arrive monthly rather than quarterly, from an actively managed overlay on the 500 largest US listed companies.

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.

• XSPI Fees run high: 0.98% versus a roughly 0.6% median for S&P 500 options-income funds, and above the unleveraged sibling SPYI at 0.68%. The boost and the overlay cost real money.
• Leverage cuts both ways. Roughly 150% notional exposure magnifies drawdowns as well as gains, and the call overlay can mute part of the bounce back.neosfunds.comsec.gov
• Launched in February 2026, so the track record is thin, and a payout funded partly by return of capital reduces both net asset value and your cost basis over time.neosfunds.com

Full PEPS profile⁠

Full XSPI profile⁠