IWMI is a sustainable high-income fund with stable returns and positive NAV growth.

Now, let's talk about the second highest yielding fund that's also seen positive net asset value growth, and that's going to be IWMI. And that's from a lot of people's favorite fund issuer.

That's going to be NEOS. This is their Russell 2000 highinccome ETF. And the AUM has grown substantially since inception. They're already sitting at about 1.2 billion in AUM.

So let's talk about this fund for a moment. If we jump over to Yield Canary, come up here. Let's go ahead and plug it in. IWMI. And we can see it right here. It's considered a very healthy fund with stable return of capital.

So let's take a closer look. We can see the price has been very stable. But take a look at the distributions. Here's what's always so interesting about these NEOS funds. What they're able to do is provide very stable distributions through strategic return of capital.

Return of capital is not always automatically destructive. It can be used for tax purposes when done well. And based on what Yield Canary is telling us, this fund is not going away anytime soon. It's a sustainable fund.

So, let's dive into why that's the case. If we jump over to Neos's website, what we can see is its distribution rate is sitting at about 14.51%. Now, if we look at the fund's fact sheet, what you'll notice is the first goal is high monthly income generation.

That's somewhat evident based on the fact it's in this video. But one of the huge focuses for NEOS that a lot of fund managers miss is tax efficiency. IWMI utilizes what's known as 1256 contracts, meaning 60% long-term and 40% short-term capital gains. and fund managers may seek to take advantage of tax loss harvesting opportunities.

Of course, there's upside potential which they've been able to pull off in the last year. The fund is up by about 5.31% despite providing that high yield, a trailing 12-month yield of 14.19%.

Now, something else I do want to quickly point out in this instance for these funds, typically we look at the trailing 12-month yield, and that does provide a lot of insight. But keep in mind, because these are funds that have the ability to grow distributions over time, simply if they're seeing net asset value growth, that means that the actual yield you would have gotten if you bought this fund about a year ago is closer to around 15%.

The yield on cost is actually growing when the fund's net asset value is growing. So, that's a very important note to keep in mind that I see the vast majority of investors miss out on.

Now, we do need to note when we look at IWI, scroll all the way over, you will notice they use a more aggressive portfolio coverage strategy. It's typically between 75 and 100%.

So, over the long term, there probably would be less upside relative to a fund like QYLG who has less portfolio coverage.

But also note, there's a different option strategy. QLG is using those at the money calls while IWMI is using out of the money calls. So just to briefly explain what that actually looks like in theory, at the money calls typically has higher premiums but caps a lot more of the upside, is optimal in sideways or slightly bearish markets.

Meanwhile, out of the money is typically going to provide lower premiums but still allows some more of the upside and is better in bullish markets. So that's a very basic overview of those two option strategies.

But according to Yield Canary, we can see this appears to be a quite healthy fund. Obviously, it's very well diversified with the Russell 2000 and it's providing a sustainable yield so far.

Now, the third highest yielding fund that is also seen positive net asset value growth is going to be QQQI. Again, another fund from NEO. So, the structure is going to be very closely related to the fund we just saw, IWMI.

And if we look at the funds fact sheet, it's basically the exact same as I WMI, which we just saw. High monthly income generation. there is tax efficiency and then of course they they aim to take some part in the upside potential.