NEOS Investments

NEOS Investments is an asset management firm specializing in options-based exchange-traded funds (ETFs) designed to provide tax-efficient, high monthly income. The company was founded in 2022 by Garrett Paolella and Troy Cates, who serve as Managing Partners. Both founders have extensive experience in the financial services and ETF industry, having previously launched and managed other options-based ETF companies. Paolella's background includes C-level roles at Harvest Volatility Management and Horizons ETFs, and he founded Recon Capital, which was later sold to Mirae Asset Global Investments. He and Cates have worked together for over 15 years and NEOS marks their second venture in the options-based ETF space.

The firm's name, NEOS, stands for Next Evolution Option Strategies. Its business model centers on creating, managing, and distributing actively managed ETFs that utilize quantitative, data-driven options strategies. These strategies aim to generate income for investors from core asset classes like equities and fixed income. The company generates revenue through asset-based fees calculated as a percentage of assets under management. NEOS caters to a range of clients, including financial advisors and individual investors, offering its products as accessible portfolio building blocks.

NEOS launched its first suite of ETFs in August 2022, which included the NEOS S&P 500 High Income ETF (SPYI), the NEOS Enhanced Income Aggregate Bond ETF (BNDI), and the NEOS Enhanced Income 1-3 Month T-Bill ETF (CSHI). The firm's product line has since expanded to include funds focused on the Nasdaq-100, Russell 2000, Bitcoin, gold, and real estate, among others. The strategies employed vary by fund; for instance, their equity funds often use a call spread approach on an index to generate income, while their fixed-income products may use a put spread strategy to enhance yield. This approach is designed to provide higher income streams than the underlying assets alone, with a focus on tax efficiency by using index options treated as Section 1256 Contracts.

Keywords: options-based ETFs, high income funds, monthly income, tax-efficient investing, asset management, exchange-traded funds, quantitative strategies, call spread, put spread, SPYI, CSHI, BNDI, investment management, covered call strategy, yield enhancement, financial derivatives, income generation, portfolio solutions, liquid alternatives