IWMI: Small Caps, Big Dividends

Jack Bowman8.28K FollowersFollow5ShareSavePlay(9min)Comment(1)SummaryThe NEOS Russell 2000 High Income ETF offers high monthly income via a covered call strategy on the Russell 2000 index.IWMI currently yields a 14% distribution rate, with approximately 95% of payouts classified as return of capital, offering tax advantages for many investors.The ETF provides diversification away from tech-heavy large caps, with sector exposure favoring finance and healthcare, and benefits from recent small-cap outperformance.I rate IWMI a "Buy" for income-focused investors seeking small/mid-cap exposure but prefer uncovered small caps for total return potential. Wirestock/iStock via Getty Images My regular readers will know that I love small-cap stocks; I think there's a lot of alpha in small caps. What there is also a lot of is volatility, and so it's only natural that NEOS ETFs, a fund manager that I have coveredThis article was written byJack Bowman8.28K FollowersFollowNewsletter Author | Investment Advisor | Top 5% of Experts on TipRanks | Long Signal, Short Noise | I am a macro-oriented and data-driven investor who obsesses over connecting dots that others don't see (or want to see), expressing my views through concentrated, asymmetrical, and high-conviction positions. I manage risk with discipline, often reminding investors that position sizing is often more important than security selection. I'm on a quest to uncover narrative trends before mainstream financial media, a process I've been describing as the hunt for information alpha. My weekly newsletter is called The Macro Obsession. "Successful investing requires holding uncomfortably idiosyncratic positions." — Howard Marks, paraphrasing David Swensen "History does not repeat, it instructs." — Timothy Snyder, On TyrannyAnalyst’s Disclosure:I/we have a beneficial long position in the shares of IWM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You