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The NEOS MLP & Energy Infrastructure High Income ETF is structured to provide investors with significant monthly payouts, optimized for tax efficiency, while also pursuing opportunities for capital appreciation.
Is MLPI's expense ratio expensive, average, or a steal for its category?
Pro reveals the verdict on a 5-tier spectrum calibrated against ICI 2025 industry averages, with strategy-aware bands so the comparison is meaningful.
The NEOS MLP & Energy Infrastructure High Income ETF is rated a Buy, offering a 14% yield with a floating distribution and no fund-level leverage. The NXG NextGen Infrastructure Income Fund is rated a Sell due to questionable payout coverage, high leverage, and a fixed distribution dependent on capital gains. MLPI's floating distribution adjusts with market conditions, reducing the risk of abrupt cuts, while NXG's fixed payout is vulnerable to NAV declines and leverage risks.
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Long-duration Treasuries finally offer an enticing yield, but several less obvious risks could undermine both the income and the hedge. Covered call ETFs share more with fixed income than most investors realize, and today's environment is paying them more for that role. The biggest, most popular covered call funds may fail exactly when defense is needed most.
NEOS MLP & Energy Infrastructure High Income ETF (MLPI) offers high income via a 14% nominal dividend, primarily funded by option premiums and realized gains. MLPI's concentrated midstream portfolio is attractive, but the covered call strategy sacrifices capital appreciation for current income, leading to underperformance versus peers in bull markets. I rate MLPI a Hold, favoring it for income-focused investors expecting sideways to moderately bullish markets, but not for those seeking maximum total return.
Investor sentiment and credit markets suggest defensive positioning is at levels not seen in years. Popular safe-haven assets come with a hidden cost that could hurt investors if the bearish signals prove wrong. 2 covered call ETFs that I discuss in this article offer a compelling middle ground between high income and downside resilience.