🤝 BFF Take
SPYI's More Flexible Options Strategy Justifies Its Higher Cost for Most
XYLD (Global X S&P 500 Covered Call) has been writing covered calls on the S&P 500 since 2013, selling one-month at-the-money calls each month and distributing the premium. The approach is simple and transparent, but it caps almost all upside. In 2023-2024, XYLD participated in nearly none of the S&P 500 rally above the strike price. SPYI (NEOS S&P 500 High Income) launched in 2022 with a more sophisticated approach: it uses S&P 500 index options (not individual stock options), writes at a slightly different strike, and uses tax-efficient return-of-capital distributions. SPYI has delivered higher total returns in recent periods because its options structure gives it more participation in moderate market rallies while still generating strong income. SPYI costs 0.68% vs XYLD's 0.60%. An 8 basis point difference that SPYI has more than covered through better performance.
📋 Quick Takeaways
💰XYLD: 0.60% ER, established since 2013, ~10% yield. SPYI: 0.68% ER, launched 2022, ~12% yield with more upside.
📈XYLD caps nearly all S&P 500 upside above the monthly strike. SPYI retains more participation in moderate rallies.
🎯Maximum income with simple, proven strategy: XYLD. Better income + upside trade-off with newer approach: SPYI.
📊 Data-Based Take: SPYI has the lower fee
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
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Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice
SPYI
NEOS S&P 500 High Income ETF
XYLD
Global X S&P 500 Covered Call ETF
📋 SPYI vs XYLD — Key Facts Side by Side
| Metric |
SPYI |
XYLD |
| Fund Name |
NEOS S&P 500 High Income ETF |
Global X S&P 500 Covered Call ETF |
| Issuer |
NEOS |
Global X |
| Tracks Index |
Active (S&P 500 index option strategy) |
CBOE S&P 500 BuyWrite Index |
| Expense Ratio |
0.68% |
0.60% ✓ |
| Cost per $10K/yr |
$68.00 |
$60.00 |
| AUM |
$4B |
$2.5B |
| Holdings |
503 |
503 |
| Inception |
2022 |
2013 |
| 1-Year Return |
+16.50% |
+10.50% |
| 3-Year Return |
— |
+4.50% |
| 5-Year Return |
— |
+7.20% |
| Avg Bid-Ask Spread |
0.04% |
0.05% |
Data from ETF BFF database. Returns are annualised. Not investment advice.
📊 SPYI vs XYLD — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Should You Buy SPYI or XYLD?
Choose if...
SPYI
- You already use NEOS and prefer staying within their fund family
Choose if...
XYLD
- You want the lowest fees — saves ~$8/yr per $10K vs SPYI
- You already use Global X and prefer staying within their fund family
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❓ SPYI vs XYLD — Frequently Asked Questions
What is a covered call ETF?
A covered call ETF holds stocks (or a stock index) and simultaneously sells call options on those holdings. The option buyer pays a premium for the right to buy the stocks at a fixed price. The ETF collects that premium and distributes it to shareholders as income. The trade-off: if the stock rises above the option strike price, the ETF's upside is capped because the option buyer exercises their right to buy at the lower price. The ETF gets income but gives up capital appreciation above the strike.
Why does XYLD lag the S&P 500 so much?
XYLD sells at-the-money covered calls monthly, meaning it gives up all S&P 500 upside above each month's strike price. In 2023 and 2024, the S&P 500 rallied strongly and XYLD capped most of those gains. The monthly option premium (about 1-2% of the index level) does not compensate for missing out on 20-25% annual index appreciation. Covered call strategies work best in flat or mildly declining markets. They significantly underperform in bull markets.
Is SPYI better than XYLD?
In the periods since SPYI launched in 2022, SPYI has delivered better total returns than XYLD, combining higher income with more upside participation. SPYI's use of index options (rather than individual stock calls) and its slightly different strike selection gives it more flexibility. XYLD has a longer track record back to 2013, which allows full cycle evaluation. For most investors considering covered call strategies on the S&P 500, SPYI's more sophisticated approach has earned its slightly higher cost.
What is the yield of SPYI vs XYLD?
SPYI currently yields approximately 12% annually; XYLD yields approximately 10%. Both distribute monthly. The yields fluctuate based on options premiums, which are higher during volatile markets (when options are more expensive to buy) and lower during calm periods. Part of covered call distributions may be return of capital rather than income, depending on market conditions, which has tax implications in non-retirement accounts.
New to ETF investing? See answers to the most common ETF questions →
📄 SPYI & XYLD Fact Sheets
ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.