Thanks for those kind words. Maybe one day my small channel will be a medium sized channel. A guy can dream 😏.

Thanks! I think it will benefit from their new efforts to distribute helpful information.

What is your first?

Agreed, too many investors think ROC is only "they are paying me back my money" whereas first and foremost, ROC is a tax treatment of distributions (following the tax rules).

I'm glad Garrett's answers were able to provide you with some clarity. I learned a lot too!

Thanks for watching it so soon after posting. Glad you enjoyed it.

Thanks! I've requested more interviews with other fund managers so hopefully more of these to come.

That feedback is helpful. I think we should question everything. Sometimes we draw the wrong conclusions. But as long as we keep searching we’ll eventually get to the truth.

Thanks for sharing those thoughts. I agree 100%. I don’t want to watch a 30 minute commercial. I think some KZfaqrs are worried that they won’t get any more fund managers if they ask challenging questions. My primary motivation is to get the information to make investment decisions not to look clever.

Glad you enjoyed it! I come from the same perspective. As an investor I want to know the downsides. The upsides are obvious.

Wow 🤩. Never had a standing ovation before. Thanks for typing such kind words. I appreciate it!

Glad you like them, it makes a nice change from talking solo.

Thanks for your feedback. I hate clickbait as much as you do :)

Glad you enjoyed it, and thanks for your feedback :)

Thanks for letting me know and sorry about the U Turn! I wanted to like it back in June but so many weird things...that turned out to be OK. Welcome to the retired club :) If you're not already in the Armchair Income Community, here's a link: facebook.com/groups/1960447914286446/

Thanks. I appreciate your feedback.

Glad it was helpful. He cleared up a lot of doubts for me so I was happy as an investor to get answers.

I'm glad you found it useful. I learned a lot too.

Thanks Jim. Those are good questions for a future interview.

Thanks for the feedback. I don’t mind some ROC in small doses but when it’s 90% of the distribution I need answers and Garrett delivered!

@@armchairincomechannel I agree. It did look odd. But I’ve been looking for a fund similar to this for years. Ideally, I want a fund that tracks the S&P 500, has low fees, and pays 5% dividend - with 1.5% on qualified dividends and 3.5% in ROC. This would allow total distributions of $200k+ with zero immediate federal tax hit. As long as the total return is fine, ROC gives tax flexibility.

Thank you so much 😀 I appreciate your encouragement!

It's a logical progresssion!

QQQI

More to come! Glad you enjoyed it. 😀

Glad you enjoyed it. I appreciate your feedback. It’s good motivation while doing the behind the scenes work. 😀.

Thanks for your feedback, glad you found it helpful.

That's a good question. I think generally, a sharp downturn followed by a sharp recovery (like March 2020) is a relatively bad scenario for covered call funds. Just a question of how ofter that happens and how bad it is.

He mentioned something similar and stated they would sell ATM calls...but it would have been useful to know what the model is trained to do in a sharp downfall. Active funds should be better managed in those situations in theory.

Thanks for your feedback and strategy. Your suggestion creates a nice blend of income and growth. Personally, I like to diversify more than that, but I get your point.

Twice is nice! I'll address that question in a future video but between you and me...yes :)

Glad you enjoyed it! Thanks for the encouragement 😀

Glad you enjoyed it, and thanks for the feedback. I hope to do many more interviews in the future.

Glad you enjoyed it! I appreciate your feedback. I’ll continue to look for fund managers willing to answer directly and openly. It’s more interesting than watching a promotion video 😀.

Glad you found it useful, thanks for letting me know.

Thanks for sharing. That’s an excellent strategy. I don’t think SPYI trading volume is high enough yet for a liquid options market but it’s likely to get there.

Thanks for the suggestion. I have a limited patience for tax info too! I’ll try time stamps next time. Good idea 👍🏼

Glad it was helpful! There are a lot of moving parts to follow, especially as it relates to options. I plan to break those down in a future video.

I agree. Also, expect a QQQI video later this month :)

Always makes me happy when people do their own research instead of just buying based on tips. Thanks for your supportive feedback 😀

I agree that the tax advantageous are worth noting. Overall, my opinion of this fund has improved dramatically in recent months so I'll make an update video shortly. As for allocation, I'm a diversifier so I like to spread the risk among many funds (and a few stocks too).

Do they sell covere😮d cslls on. Indiv stocks or just spx options ?

Thanks for the feedback.

I thought that was interesting too! I like all 3.

That is true

It would be greater. The ROC you received would lower your cost basis below 10k.

Thanks for sharing your insight.

Thanks for your feedback. The tax makes a big difference for some people.

I agree. Watching the performance over the past year and listening to Garrett’s answers has changed my opinion of SPYI to the positive. If the yield is high enough, I don’t need growth.

Yes, that’s appealing to income investors, especially retirees.

Glad it was helpful! Thanks for watching and letting me know what you think.

Thanks for sharing your strategy!

That's a good question, I'm in a similar situation. My intuition says no, but I'm not an accountant. I'll keep that one in my pocket for another interview.

Glad you found it helpful, thanks for letting me know :)

Thanks for the feedback and glad it’s working for you.

It works for me too. Thanks for watching.

Options premiums have dropped significantly but SPYI keeps paying similar amounts. I’ll pass.

I had exactly the same concern so I asked that question fairly early on in the interview.

@@armchairincomechannelhi I’m sorry can you tell us at what time stamp you asked that question? I’ll relook at the video though

That's correct. I'm not sure if "tax loss pairing" is the correct term but the concept is accurate. 2 different ROC concepts that sound the same but are actually quite different. The tax code is unnecessarily confusing.

​@@armchairincomechannel pairing losses with gains labeled roc is what i meant Loved your video on Main caputal as well Love to see your take on Realty income stock too if youv'e got the time Thanx

Thanks. By the way…who’s Mark?

@@armchairincomechannel sorry my friend, thought i remembered from somewhere that was your name. Embarrassing. 🤦🤦🤦

lol. No problemo. Have a great day Jeff!..I mean Adrian...never mind ;)

@@armchairincomechannel lol thank you Tom. 😉

It’s in the works. Should be ready this month.

Interesting mix. Goldman is a bit new for me. QQQI is new but the strategy is a carbon copy of SPYI so that increases my comfort level...still easing into it slowly though.

That's true. So it depends on whether you pay a higher rate on ordinary income or capital gains. Most people pay less on capital gains, especially long term capital gains.

@@armchairincomechannel True, the capital gains tax rate is usually less. What I was trying to say was that, after many years of ROC, your cost basis may be close to $0, so the sales price is almost all a capital gain. Even though the tax rate may be lower, it’s all due that year. A similar thing happened or me with Kinder Morgan a few years back. When Richard Kinder decided to take KMI from being an MLP to being a regular corp, I was forced to sell my units, with a very low cost basis (because of depreciation) and got a huge tax bill because of it (recapture of depreciated asset).

That's true. If I was subject to a large capital gains tax exposure, I'd rather it be for an income fund than a growth fund, as the growth fund doesn't do anything for me until I sell it.

Thanks for your feedback, glad you liked it!

Yes, but I would also download the tax form from the NEOS website and give that to your tax accountant as it explains the ROC.

Thanks for your feedback, glad you found it useful :)

Thanks for your encouraging words. The channel gained 2,000 subs in the last 30 days...so making some progress. If people were to spread the word about Armchair Income, it would be appreciated...as long as it's done with respect, of course! BMEZ looks interesting, I'll take a look, thanks.

SPYI's recovery from a 30-40% bear market would depend on the speed of the market's recovery. It would recover at a similar rate to the market if the market recovers slowly. It would recover much more slowly than the market if the market recovers quickly. QYLD is based on the NASDAQ so XYLD, which is based on the S&P 500 would be a fairer comparison. SPYI would recover more quickly than XYLD because it doesn't sell calls on 100% of the portfolio and it doesn't sell at the money calls. The dividend is a function of the total value of the fund's portfolio (if the portfolio drops by 50% then the dividend will fall), as well as the volatility...which drives option prices.

I can't speak for your Australian tax obligation, but for the US tax obligation it is beneficial because a large percentage of the distribution shifts from taxable income to non-taxable capital gain. That's assuming you file a tax return with the IRS. If you don't bother to file a return wtih the IRS, then you'll have dividend withholding deducted at the same rate for every income investment and no chance of a refund.

Thanks! Glad you enjoyed it.

Thanks! I think Roger Federer is the goat, but to each his own :) That made my day, much appreciated.

@@armchairincomechannel carlitooo alcaraz is on the hunt haha

He has all the tools if he can stay healthy.

It's like you're reading my mind :) Yes, it's in the works and should be ready before the end of the month.

That's correct. Covered call funds do worst when the market is ripping. That's why I don't put 100% of my assets into them. When the market is trading sideways, SPYI will outperform SPY. Most of the time, SPY will create the highest total return, but it doesn't send you cash each month to pay the bills...you have to know when to sell it at highs do something else when it's down (like 2022)...that's not ideal if you're retired.

@armchairincomechannel I am retired, and what is ideal for me is to get in a trade that has the highest probability for profit, which I periodically take out. Being retired doesn't mean you need to get paid every month. I take profits only 3 or 4 times a year, but they are big enough to pay for everything (I prepay mortgage for months). 'Short vix', ZIVB is paying for my retirement rn. It's up 50% for only 8 months, which means I can withdraw 30% of the Net Liquidation Value of my position and have the same amount of money left invested in it like I had 8 months ago.

The more disciplined you are, the less frequent you need to receive distributions. Some people favor monthly payouts, I'm ok with quarterly or monthly. Sounds like you are ok with less frequent than that.

They're settled for cash. Here's a quote from page 5 of the Prospectus: The Fund focuses primarily on SPX call options which offer both European settlement (i.e., options can only be exercised at their expiration date) and cash settlement (i.e., options carry an obligation by their seller to pay the difference between their strike price and their settlement value instead of allowing the seller to take delivery of securities). www.sec.gov/Archives/edgar/data/1848758/000183988222011065/shp-485apos_052322.htm

@@armchairincomechannel thanks. I think I understood that. So, if the option they sold expires itm, they can pay the buyer off and keep the stock? Or is this when they would just buy the next strike.

I’ll cover my updated opinion in a video soon but to answer your question…yes 👍🏼😀.

JEPI includes value in its stock selection criteria (versus growth) so it should do better during a market correction. Therefore, the argument to hold it would be to smooth out some volatility in a portfolio vs holding a fund that strictly mirrors the S&P 500.

Thanks! Planning to do more interviews in 2024.

Garrett? Via email. The old fashioned way.

Unfortunately these tax questions are for a tax accountant and/or Fidelity. I've never used Turbo tax so I can't share any experience with it, and I'm not a tax advisor. What I can tell you is that the return of capital tax treatment is not unique to the NEOS SPYI fund. The same tax treatment is given by funds from Eaton Vance and Global X (eg QYLD).

I use TurboTax …yes …you get a composite 1099 from your brokerage…neos reports all this to your broker …the 1099 if you read it will show the roc ….they usually refer to it as a non taxable amount…but bottom line is TurboTax imports it all and allocates it properly…that has been my experience for many years.

So far, so good :)

We won't have an accurate breakdown of the tax treatment until the end of year tax statements are issued, but in broad terms, the majority is Return of Capital, which will lower the cost basis then be tax on sale as capital gains. The minority will be dividends from S&P 500 companies, which will be a combination of ordinary and qualified dividends. Thanks for watching.

I'm not qualified to give tax advice but in general terms..a Roth IRA allows you to contribute after tax dollars and your earnings grow tax free, after which they can be withdrawn after age 59 1/2. Based on that explanation (sourced from Schwab) the answer is "yes".

@@armchairincomechannel thanks

It would lower your tax burden but SPYI already more tax efficient than most competitors because it distributes a high percentage of return of capital which is taxed as capital gain rather than income. A Roth is usually used for the least tax efficient investments.

It can be good or bad. No income tax due but your cost basis is lowered, and capital gains tax is due when you sell...if you sell.....There's no free lunch but its a better tax scenario for most people.

@@armchairincomechannel This is a common thing with covered call etfs. Works for me if the NAV doesn’t depreciate too much.

You raised an important question. I’ll address it in a future video. Most of their return comes from the distribution. If they distribute their assets then those distributions aren’t net returns. It’s an ETF so the NAV equals the price. The NAV has been flat, despite high, consistent distributions. In other words, it hasn’t eroded, which was my concern. It’s still a young fund but at this point it’s on track with its objective to produce income and keep up with SPY in total returns (or almost keep up).

@@armchairincomechannel Thank you for picking up my remarks. You are right total return is on track given the implied strategic limitation when the underlying is going up quickly, what happened this summer. However, I would propose they increase transparency big time. They still do not give clear picture what part of their different tactical instruments , i.e. buying calls, selling calls etc. has contributed how much to the monthly result. In short, I am missing a monthly P&L statement by the instruments used. Why can´t they tell us what they do or did? What went good, what failed, and why? Compare it to the way better transparency of yieldmax.

Thanks for sharing.

Yes, that’s a whole other can of worms I’ll address at another time.

Good point, thanks for watching :)

If you didn't receive dividends, contact your broker and ask them to resolve. I've received my SPYI dividends, as has everybody in the Armchair Community. Regarding withholding tax at 30%, that's the default setting for every US stock and has nothing to do with SPYI. If you haven't already, check to see if your country has a tax treaty with the US and if that tax treaty entitles you to a lower rate of withholding. Many countries have rates as low as 15%. Lastly, the actual taxable amount you owe is almost certain to be far less than 30%, so if you file a tax return with the IRS, you are likely to receive a refund.

Thank you for your advice👍I will check that out.

You're welcome. Sorry to hear about the glitch and hope its resolved soon. If you haven't looked at Interactive Brokers, they're good for Non-US accounts and familiar the reduction of withholding taxes based on tax treaties.

Thank you very much! Appreciate the feedback.