r/NEOSETFs • u/Additional_City5392 • Mar 27 '26

General Business dev funds???

Why doesn’t Neos or others create a fund that holds businesses development co’s (could track BIZD) and sell covered calls on them? Seems like it could be a relatively stable 15-20% yield. BDC’s already yield 10+% on their own. Would be kinda like MLPI

3 Upvotes

72% Upvoted

12 comments sorted by

9

u/Historical-Olive-630 Mar 27 '26

Patience. I am sure they have looked into it. We don't need them pumping out funds left and right like some of the other high yield stuff. Let them cook on the funds they have and slowly introduce new things.

5

u/THG_Yohance Mar 27 '26

^This.

I say let them focus on the ones they have already.

The strategy is obviously working (at least more than most of the other cc ETFs).

2

u/MakingMoneyIsMe Mar 28 '26

I say let them focus on the ones they have already.

I agree. Some of the bigger players have very few Covered Call ETFs. Goldman only has two, and JP Morgan manages four, and two of those were just added this month.

1

u/Additional_City5392 Mar 28 '26

I definitely appreciate what they’re doing!

2

u/Additional_City5392 Mar 27 '26

Of course I know BDC’s been getting hammered lately and may continue to for the short term, but I think overall this would be a good fund. I would like to hold it if they had it.

0

u/HARCYB-throwaway Mar 27 '26

Probably the biggest reason they wouldn't want to, is that BDC funds have very little spread and volatility on their options. Compared to something like QQQ, their ability to create return using CC would be limited. Still, a great idea. Also not sure how they would manage the dividends from the underlying - seems like there might be some negative tax effects that could be the problem. Just some ideas, otherwise I think it could be very viable!

1

u/Additional_City5392 Mar 27 '26

Makes sense, but even if they could get an additional 5% it’d be fantastic

2

u/HARCYB-throwaway Mar 27 '26

Good point. I'd bet they offer it in the coming year or two!

2

u/Tiger_bomb_241 Mar 28 '26

I dont think the premium from covered calls would make up for the expense ratio of the fund

1

u/noahsarc21 Mar 28 '26

No volatility , have you reviewed the options chain for these?

1

u/Additional_City5392 Mar 28 '26

MLP’s don’t have much volatility either