Core Viewpoint - Real estate investment trusts (REITs) and related ETFs have underperformed in 2023, but there is optimism for improved performance in 2026, particularly for the NEOS Real Estate High Income ETF (IYRI) which has a strong income-generating potential [1][2]. Group 1: Performance and Income Generation - The NEOS Real Estate High Income ETF (IYRI) has a distribution rate of 10.77% as of November 30, indicating its strong income-generating capabilities in a sector known for high income levels [2]. - IYRI employs an options-based strategy by selling call options on ETFs tracking the Dow Jones U.S. Real Estate Capped Index, which is a widely observed measure of U.S.-listed REITs [1][2]. Group 2: Future Outlook and Catalysts - Analysts anticipate increased mergers and acquisitions activity in the real estate sector by 2026, which could positively impact IYRI and other REITs [3]. - The demand for data centers, driven by artificial intelligence (AI), is expected to remain strong, benefiting IYRI as the Dow Jones U.S. Real Estate Capped Index includes data center REITs [4]. - Management teams are focusing on segments with recurring revenue profiles, such as Senior Housing, which could lead to favorable conditions for REITs heading into 2026 [5].

"NEOS has had success gathering assets in 2025 by offering advisors options based high income strategies,†said TMX VettaFi Head of Research Todd Rosenbluth, noting the success of their other funds — namely the NEOS S&P 500 High Income ETF (SPYI) and NEOS Nasdaq 100 High Income ETF (QQQI). "It is great to see them continue to expand their lineup for the MLP investment style.†In an easing monetary policy environment, yields start to fall in line with rate cuts. Bond investors might be seeking to supplant th ...

Core Viewpoint - The real estate sector is seen as attractive for income investors, especially with expectations of upcoming interest rate cuts by the Federal Reserve [1] Group 1: Real Estate Sector Performance - The Dow Jones U.S. Real Estate Capped Index has a trailing 12-month dividend yield of 2.32%, which is approximately double that of a basic S&P 500 ETF, but still not particularly high [2] - The NEOS Real Estate High Income ETF (IYRI), launched in January, has shown strong performance with assets under management totaling $136.4 million and an impressive yield of 11.71% [3] Group 2: Investment Strategy - IYRI operates as a covered call ETF, allowing for potential upside participation if real estate investment trusts (REITs) rally, particularly around the Federal Reserve's meeting on October 29 [4] - Unlike traditional REIT ETFs, IYRI is less dependent on Federal Reserve actions, which is beneficial given the uncertainty of the Fed's decisions [5] Group 3: REIT Market Dynamics - In the third quarter of 2025, U.S. REITs raised a total of $21.3 billion through secondary debt and equity offerings, with $14.0 billion from debt, $6.6 billion from common equity, and $740 million from preferred equity [6] - REITs are sensitive to interest rates, but IYRI's structure mitigates this sensitivity, potentially positioning it favorably if the Fed acts as anticipated [7] - Lower interest rates are crucial for enhancing REIT performance by reducing borrowing costs, increasing property values, and strengthening dividend-paying models, with historical data showing REITs outperforming broader U.S. stocks following Fed easing cycles [8]