Wow - thank you for the great interview with Garrett, once again! This really comes down to quality...and NEOS has it. There is simply no comparison to Defiance, Yield Max, and even Roundhill. When I look at their funds (and yes, some of them do well for now) and compare to NEOS, they seem gimmicky. When I hear interviews by their key fund managers/leaders (Jay, Sylvia, etc.), it feels more like a sales pitch than a long-term investment. Investing is about slow, steady, "boring" progress...and that is why the NEOS approach, long-term, has the right vehicles to achieve this.
Thanks for your feedback. I like doing these interviews because you can get a sense of the priorities of the fund managers and their general approach to investing. Sometimes that's as important as the numbers on the page.
With small, new ETFs like HYBI and BTCI, be sure to use LIMIT ORDERS. With small, thinly traded ETFs like these, the Bid/Ask spread will be HUGE. You don't want to do a Market Order and immediately be around -2% in the hole.
Thanks for that note. I wasn't even thinking about that, because I often use "Market" to just get the trade done with. But wouldn't want to start out behind for sure.
Yes, it's worth checking for newer funds. You can just look at the bid/ask spread and see if the gap is wide. Last time I checked it was quite small but a limit order removes the risk.
"With small, new ETFs like HYBI and BTCI, be sure to use LIMIT ORDERS. With small, thinly traded ETFs like these, the Bid/Ask spread will be HUGE. " Um....maybe. BTCI has a pretty large spread but BTCI (as I type this) has a spread of $0.03. What matters much more regardless of the bid to ask spread is the NAV and current price. Do I mind a larger spread if a fund is trading under NAV? Nope. Do I mind a spread of the fund is at NAV, yeap so that is where one should use the limit orders....but that is still missing some information such as how far above NAV is it and how often is it priced in that range. Example - BTCI appears to have about a 10 bp premium so paying at NAV is almost certainly not an issue as you will likely be able to get some positive move up just from reversion to the mean (assuming the underlying assets remain unchanged). Little more complex that just because small, new, thinly traded, etc. Bid / Ask need to be evaluated to NAV and NAV average over time, or is there an income stream that is enough that you can let paying a tiny premium just to get the trade over with is fine as the first dividend will make up for the premium you paid on a fund you might hold for years, etc.
Great vid , love the point you eluded to that it’s in between cshi and qqqi , I think that’s a great attraction for someone who wants a great yield with diversification away from high volatility
i am really impressed with this company to this point they seem like they have a really good team... and love your interviews with them!! it seems he enjoys your interviews lol
I have been considering this ETF since I first saw it described in this video. Today I watched it again and just bought 300 shares. I didn't have any exposure to bonds, so this makes sense for me as a way to diversify a bit. Thanks for the info. I also enjoyed your chat with the "Wealth Adventures" dude.
Thanks for watching both videos, and also....thanks for sharing your investment update :) I'll keep an eye on HYBI and assuming it continues to do what its supposed to (likely), I'll be buying some too.
Great work, as usual. I would never have considered income investing if you had not come along on RUclips. I am very much a growth investor but my higher risk time horizon is down to about 2-3 years. I’ve dipped my toe into this area and will keep learning and expanding until I make big move in next two-4 years for either a regular 62 retirement or maybe a 60-61 retirement if the markets decide to go bonkers up for another two years. Thank you so much.
After watching this video I bought 10k of hybi , it was a helpful idea with the market up post election with what to buy.. hybi in my dumb money mind would also balance some covered call government bond/treasury funds i also bought since this runs puts on corporate bonds . To the fund manager Thank you for finding this channel to reach me!!
I have a high level of confidence in NEOS products and management methodologies based on their track records alone. I'll soon be feathering a position into HYBI.
You're quite a fan! I don't hold all the NEOS funds but I have a few and am happy with them. I'll give HYBI some more time to show more data before investing but the concept looks good.
An interesting comparison would be to TLTW where that is the writing calls against the US treasury long bond ETF. It looks like the 2 have a similar yield, but with more credit risk in HYBI, but also more upside potential in that TLTW writes calls closer to the current price. I guess let's just see how both perform going forward.
HYBI has much shorter duration than TLTW (ie less volatile) and most of the time the credit risk is higher, so it's hard to compare them. Also, HYBI is actively managed so the risk level is constantly changing, as evidenced by the recent shift in holdings to short term treasuries.
Your interviews are excellent. Great questions on how the fund works and how it would theoretically behave in bull and bear scenarios. Most importantly for me is the unbiased questions and interview style. I wish you reviewed Canadian yield funds. No names but there is a popular canadian passive income channel that is so biased to the managers during interviews it's embarrassing how he fawns over them. Really appreciate your fact based and unbiased approach to your interviews.
Thank you for the feedback. I won't mention any names either but I know who you're referring to. There's no such thing as "best" or "perfect" or any investment that "everybody should buy". Each investment has risks and I won't buy an investment unless/until I know those risks. So unless the risk are addressed, it's more like an advertisement than an interview. Also, I don't take sponsorships or payments of any kind from any funds.
Thank you very much for your detailed analysis, having guests on who are relevant, and providing a base for doing further research. Your questions are educated and pertinent.
I’m happy for Garrett. He seems like a nice guy straight shooter, and is always a good interview. I’m glad his fund is over 2 billion. I bet he’s over the moon about the success of his company (even if he’s not the most emotive guy 😂)
I like interviewing him because I can ask him anything and he always answers. When I ask him about AUM, he actually doesn't like to brag about it...but I mention it because I think he deserves some recognition.
Great interview and i probably need to watch it once more to fully grasp the concept. I did miss your summary at the end on your intentions to buy now or wait?❤
Enjoyed this interview and the one you did with Dave, so thank you. The real estate ETF sounds interesting, as there aren't many sector covered call ETFs in the market currently. PS. In the interview with Dave you could've mentioned NZ as well as Papua New Guinea (places close to Australia) : )
I was thinking the same thing. Technically, PNG is much closer to the Australian mainland than NZ. However, 3 hours to NZ is pretty close. I agree...I should have included NZ as a "close" country.
I've watched this video 3 times. Tomorrow I'm going to reduce my QQQI and SPYI positions and add HYBI. My risk tolerance is shrinking (retired) and QQQ and SPY are too expensive for me.
You're quick on the draw! It's a new strategy for me so I'll wait a bit longer. I expect it to remain steady so it's not like I need to get in early before it "takes off".
@armchairincomechannel I have CDs which matured and many more to come; NEOS has proven track record and I need some diversity in my income factory. Cheers.
thanks for the analysis. Any chance you could circle back to CSWC?? Just took a dive on news of convertible notes offering and a meh report. How will that affect the company moving forward with falling interest rates?
Hey Armchair- I began watching the interview for the second time. Did he ever mention if as a mutual fund options were being used? Or is that something new that Neos added on?
I just requested the official explanation from NEOS, however, my assumption is that they did it because 1/ They inherited a low priced ETF when they took over the fund 2/ There's a minimum price required to maintain a listing on the exchange and 3/ The market has a more positive perception of higher priced funds. Note that there's no economic effect on shareholders.
@@armchairincomechannel Thank you for your response. I follow the Neos Funds closely and was also surprised by the lack of an announcement. I had assumed they would have completed all necessary housekeeping before the fund's release. I agree that a higher priced fund often carries a positive perception. However, I share your sentiment regarding reverse splits. While there's no direct monetary impact, they often convey a negative message.
It went through a reverse 5:1 split. No change to the economics. It was simply to adjust the price from what's normal for a mutual fund (which it used to be) to what's normal for an ETF.
The split was because it transitioned from a mutual fund (typically trade at a lower price) to an ETF (typically trade at a higher price). There's no economic effect to shareholders.
@ effectively! Btw, you made me smile when you said that you don’t like the Italian cold winter… I better understand now why Canada wasn’t on your wish list to live in during retirement !! 🤣🤣🤣🥶🥶🥶🥶
Would love to see the volatility difference in a bond plus fund between using options , and using leverage instead ?! and which asset is riskier.. high yield bonds, or preferreds ? GBAB needs your inspection insight for you to comment on .. lower credit risk using mostly taxable muni's, combined with leverage.
Those are good questions. I'm not familiar with GBAB but applying leverage to lower credit risk assets is an interesting idea and the yield is good. Looks like rising interest rates crushed it in recent years. If/when it shows signs of a substantial recovery it might be worth looking into.
Something a bit unrelated. I also big tennis fun and love playing tennis while travelling. Probably you can share some of your tennis/travelling experience. I am particularly very interested in tennis friendly locations, where it is possible to find good quality adorable tennis courts and friendly tennis crowd.
I have played tennis in many countries and haven't yet found a tennis crowd that's not friendly! The channel is about income investing so I won't be covering tennis in any detail. But if I attend a Grand Slam, I'll be sure to mention it.
Is it getting difficult to remember when 8.7 % was high yield stuff ? I was disappointed when the first distribution was announced. The real estate fund sounds like it could be interesting. The markets feel a bit uncertain, for obvious reasons. always good to see you. You've got the best show on RUclips, when it comes to sustainable high yield investments.
Just saw HYBI will be reverse splitting at close of trading today December 26th. Do we know why this is being done? I can't find any information to answer this question.
I haven't spoken to NEOS about it but here are my assumptions: 1/ They took over the fund from another manager so the price was something they inherited 2/ There are minimum price requirements to remain on the exchange and there's a perception that higher priced funds are of higher quality than those at the bottom of the price range. 3/ I assume NEOS wanted to price this fund such that it is in a similar range to its other funds. The reverse split has no effect on the economics of the investment. I think its more about market perception.
So if this fund was a mutual fund just renamed technically it’s not new at all. Chart goes back a good bit. If I’m understanding Garrett they kept the same formula or way that the fund originally was run, is that your take too?
They changed the mutual fund to an ETF, that's a minor change. The major change was adding the put spread overlay to increase the yield. So I wouldn't say it's the same as the previous version.
The high yield corporate bond ETFs are higher than you quote. USHY is 6.86% and SPHY, SCYB, PHYL, and SHYG are 7-8%. I'm in these "chasing" rates for income. So how much more does HYBI pay for me to want to pay a 0.68% fee? I would want to see a lowering of the risk, not increasing rate.
HYBI pays about 2% more than USHY and it's active management is designed to reduce the HYBI volatility to less than the USHY volatility. To pay the 0.68% you'd have to see value in earning the extra yield and experiencing less volatility. That's a personal choice.
I like the yield & tax efficiency, but it seems like the SPX options overlay defeats the purpose of bonds in a portfolio, since they would bleed value in a prolonged bear market.
Thanks for your feedback. That's a good point. I don't think the SPX options will move the needle significantly but it will depend on NEOS' ability to manage those put spreads during a bear market.
Can a comparison be done between HYBI and TLTW please? Are they competitive or complimentary? Would owning both offer some diversification in income sources, from different providers and there different traders, and slightly different strategies? e.g., TLTW buy 2% OTM Calls and it sounds like HYBI buys 5-8% OTM Calls and reviewed weekly.
Thanks for the suggestion. They are quite different. HYBI is more active and can adjust to market risk. Also, it doesn't come with the long duration risk of 20 year treasuries. It looks to me like TLTW requires more market timing to succeed than HYBI.
Hey mate, love your content! Investor from NZ here hoping to be able to do what you do in the next few years. I had a question about currency hedging. For those that invest soley in US assets denominated in USD but live outside the US, what methods do you have to hedge from a drop in the USD?
I don't hedge against the USD. I tried holding some Canadian dollars for a while and some Australian dollars and got burnt on both. Even though the USD isn't always strong, as the reserve currency, it tends to win most of the time. So I've found the USD to be easier and better for spending in Asia. The problem with holding other currencies for extended periods is that I'd need to invest them to generate income and I prefer to invest in the US. More choices, more transparency, than most other markets.
@@armchairincomechannel Thats a great point! I've tried looking for liquid income generating positions in those currencies, best I could find was HYLD and AYLD, would you ever consider those as small positions?
Hi, great video, just a question off topic, in retirement do you hold 100% of your money in these income investments (in the stock market) or do you have cash like an emergency fund, thanks
I went into detail in an old Q&A video but the short answer is "No". I have no debt, low expenses, plenty of insurance, and plenty of access to credit (via credit cards that I pay off in full) if there was an emergency. As an income investor I can calculate the opportunity cost of sitting on cash and...it is very expensive! The right thing to do also depends on personality. If X months of living expenses in cash helps you sleep better at night then that has a value too.
Many thanks, I am new to your channel and haven’t watched them all yet, only if you remember what video that was in I will watch it, yes agree 100% about the sleeping at night,
BCAT, with1479 holdings!! 230% turnover!! is truly an ''active managed fund''...did I mention 21% yield backed by 10,trillion dollar Blackrock. BSTZ, with a healthy amount private placement is another holding I like. Closed End Funds are an ideal retirement vehicle.
I don't hold those 2 but I have BST. BCAT's yield recently has been high but that's because they changed their policy to distribute a high percentage of NAV regardless of investment income. That's unlikely to be sustainable for the long term. It's doing well now though.
@@armchairincomechannel BCAT, actively trading in thin markets reminds me of Bill Gross. BSTZ, private investments looks like the next ESG....we could just follow along with old marketing but where is the fun in that.
I just requested the official explanation from NEOS, however, my assumption is that they did it because 1/ They inherited a low priced ETF when they took over the fund 2/ There's a minimum price required to maintain a listing on the exchange and 3/ The market has a more positive perception of higher priced funds. Note that there's no economic effect on shareholders.
Great interview, interesting tactical strategy . Curious about de risking element as that move to the agg or treasuries would decimate yields. If high levels of income is your primary goal, will this fund would meet that objective over the long term. .
Good question. It comes down to how long the fund needs to stay in the low risk allocations. Or perhaps it's a matter of buying it when their model says "risk on". I'm going to give it some more time before I jump in.
Currently credit spreads are tight. From my understanding this means that junk bonds have a low risk of defaulting. Once credit spreads increase, then it's time to jump ship.
@@SomeUserNameBlahBlah I don't think that sounds right. The rating of bond quality should be irrespective of what the interest rate is. The market rate spread is determined by the open market, on how much someone is willing take on for for a particular bond risk vs another bond (such as Treasury). High yield just sounds nicer... vs junk bonds sound risky. However, they are exactly the same. The narrowing of the rate spread just means someone "thinks" the spread is enough risk to take on vs something with less risk. For ~8%... there might be better choices like an ETF comprised of basket of BDCs or preferred shares. Or, I do like NEOS' QQQI, which yields ~15% but it assumes tech doesn't crash. If there is a serious recession, a lot of those high yield bonds will be worthless.
Yes, more yield comes with more risk, or at least a different risk. Given that HYBI is actively managed, I would argue that it is less risky than just buying a regular high yield corporate bond ETF. The recent shift to short term treasuries is an example. If you look at historical default rates for high yield bonds, the risk is higher than for investment grade, but so is the reward. It's depends what your goals are. Also, you have to multiply the default rate by the collection rate, as the creditors often receive their share of the remaining secured assets in a bankruptcy. Plenty of people have made decent returns on junk bonds but I wouldn't go all in on them.
"Junk bond" is a misnomer. All that means is that the bond is from a corporation that is considered "non-investment grade" by rating agencies. Do you own any equity positions in mid cap or small cap stocks in your retirement accounts? If so, guess what? You are an equity investor in non investment grade companies and therefore, from an accounting perspective, are actually taking more risk than somebody investing in a so called "junk bond".
@@danstevens64 While I somewhat agree to the possible creditworthiness of some a small to mid-cap companies as in junk category. I disagree with comparing equity investments vs fixed income investments. Junk bonds are in the fix income category, while equity in small to medium stocks are completely different investments. IMO, that's intellectually inaccurate comparison.
Good question. It's a new strategy so I I'll watch it closely for a little while before investing. I didn't wait long before investing in QQQI because it's the same as SPYI, except a different index. If HYBI does its job it will remain a steady ship so no rush to get in before it "takes off".
I'm waiting for more data/history before buying HYBI because it's so new. So I agree with you on not jumping into something without data. However, I still want to know what the fund manager expects their fund to do in the best and worst scenarios. Perhaps I can interest you in my review of ARCC...they have a 17 history to consider.
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Wow - thank you for the great interview with Garrett, once again!
This really comes down to quality...and NEOS has it.
There is simply no comparison to Defiance, Yield Max, and even Roundhill. When I look at their funds (and yes, some of them do well for now) and compare to NEOS, they seem gimmicky. When I hear interviews by their key fund managers/leaders (Jay, Sylvia, etc.), it feels more like a sales pitch than a long-term investment.
Investing is about slow, steady, "boring" progress...and that is why the NEOS approach, long-term, has the right vehicles to achieve this.
Thanks for your feedback. I like doing these interviews because you can get a sense of the priorities of the fund managers and their general approach to investing. Sometimes that's as important as the numbers on the page.
I like Garrett. Much easier to invest when you can get a feel for the personality "behind the curtain". Great interview! Keep them coming.
Thanks for your feedback. I agree that interviews tell you more than just reading numbers on documents.
With small, new ETFs like HYBI and BTCI, be sure to use LIMIT ORDERS. With small, thinly traded ETFs like these, the Bid/Ask spread will be HUGE. You don't want to do a Market Order and immediately be around -2% in the hole.
Good advice. I’m DCAing into these new funds, although I do trust NEOs so I wouldn’t be afraid to lump sum if I wanted to.
Thanks for that note. I wasn't even thinking about that, because I often use "Market" to just get the trade done with. But wouldn't want to start out behind for sure.
Yes, it's worth checking for newer funds. You can just look at the bid/ask spread and see if the gap is wide. Last time I checked it was quite small but a limit order removes the risk.
"With small, new ETFs like HYBI and BTCI, be sure to use LIMIT ORDERS. With small, thinly traded ETFs like these, the Bid/Ask spread will be HUGE. "
Um....maybe.
BTCI has a pretty large spread but BTCI (as I type this) has a spread of $0.03.
What matters much more regardless of the bid to ask spread is the NAV and current price.
Do I mind a larger spread if a fund is trading under NAV? Nope.
Do I mind a spread of the fund is at NAV, yeap so that is where one should use the limit orders....but that is still missing some information such as how far above NAV is it and how often is it priced in that range. Example - BTCI appears to have about a 10 bp premium so paying at NAV is almost certainly not an issue as you will likely be able to get some positive move up just from reversion to the mean (assuming the underlying assets remain unchanged).
Little more complex that just because small, new, thinly traded, etc. Bid / Ask need to be evaluated to NAV and NAV average over time, or is there an income stream that is enough that you can let paying a tiny premium just to get the trade over with is fine as the first dividend will make up for the premium you paid on a fund you might hold for years, etc.
I have 1150 shares all purchased using market orders, I had no issues
Great vid , love the point you eluded to that it’s in between cshi and qqqi , I think that’s a great attraction for someone who wants a great yield with diversification away from high volatility
Thanks for your feedback, I'm glad it was helpful.
Great interview! Get him back for those new ETFs when they drop 💪🏽
Thanks! Glad you liked it. Yes, those new ones sound interesting...
i am really impressed with this company to this point they seem like they have a really good team... and love your interviews with them!! it seems he enjoys your interviews lol
I enjoy interviewing Garrett because he will answer anything I throw at him :)
I have been considering this ETF since I first saw it described in this video. Today I watched it again and just bought 300 shares. I didn't have any exposure to bonds, so this makes sense for me as a way to diversify a bit. Thanks for the info. I also enjoyed your chat with the "Wealth Adventures" dude.
Thanks for watching both videos, and also....thanks for sharing your investment update :) I'll keep an eye on HYBI and assuming it continues to do what its supposed to (likely), I'll be buying some too.
Great content, NEOS funds and the team behind them seem to have innovative strategies that can assist our portfolio goals
They keep making funds that fit my strategy!
Hi Armchair, thank you for your informative videos. I too retired in my 40s, so your work is very relevant!
Congratulations! It's an exciting new phase of life and I hope you enjoy it as much as I do.
Excellent video!!!! Garrett is brilliant and his Neos team are the best!!! 😎
Glad you enjoyed it, thanks for watching :)
Great work, as usual. I would never have considered income investing if you had not come along on RUclips. I am very much a growth investor but my higher risk time horizon is down to about 2-3 years. I’ve dipped my toe into this area and will keep learning and expanding until I make big move in next two-4 years for either a regular 62 retirement or maybe a 60-61 retirement if the markets decide to go bonkers up for another two years. Thank you so much.
You're most welcome. I'm glad it was helpful. There are many ways to approach retirement and it's important to consider them all!
After watching this video I bought 10k of hybi , it was a helpful idea with the market up post election with what to buy.. hybi in my dumb money mind would also balance some covered call government bond/treasury funds i also bought since this runs puts on corporate bonds . To the fund manager Thank you for finding this channel to reach me!!
Thanks for sharing your thoughts. I'm considering buying HYBI but will give it some time. I like the concept.
I have a high level of confidence in NEOS products and management methodologies based on their track records alone. I'll soon be feathering a position into HYBI.
Me too. And appreciate this dudes interviews and how he sees open and pretty fair.
Thanks for your feedback. I've been happy with my NEOS funds thus far.
Great interview!!! Looking forward to learning about NEOS's 20+ Bond Buywrite Strategy and REIT ETF's . Thank you
Thanks for the feedback. I'm curious to learn more about them too.
Garrett has ALWAYS inspired me......I hold all his Funds so I guess this will be my next addition 😊😊😊
You're quite a fan! I don't hold all the NEOS funds but I have a few and am happy with them. I'll give HYBI some more time to show more data before investing but the concept looks good.
An interesting comparison would be to TLTW where that is the writing calls against the US treasury long bond ETF. It looks like the 2 have a similar yield, but with more credit risk in HYBI, but also more upside potential in that TLTW writes calls closer to the current price. I guess let's just see how both perform going forward.
HYBI has much shorter duration than TLTW (ie less volatile) and most of the time the credit risk is higher, so it's hard to compare them. Also, HYBI is actively managed so the risk level is constantly changing, as evidenced by the recent shift in holdings to short term treasuries.
Great interview. Love NEOS......
Glad the interview was helpful. I'm trying not to overweight to their funds but they keep making funds that fit my needs!
Your interviews are excellent. Great questions on how the fund works and how it would theoretically behave in bull and bear scenarios. Most importantly for me is the unbiased questions and interview style.
I wish you reviewed Canadian yield funds. No names but there is a popular canadian passive income channel that is so biased to the managers during interviews it's embarrassing how he fawns over them.
Really appreciate your fact based and unbiased approach to your interviews.
Thank you for the feedback. I won't mention any names either but I know who you're referring to. There's no such thing as "best" or "perfect" or any investment that "everybody should buy". Each investment has risks and I won't buy an investment unless/until I know those risks. So unless the risk are addressed, it's more like an advertisement than an interview. Also, I don't take sponsorships or payments of any kind from any funds.
Thank you very much for your detailed analysis, having guests on who are relevant, and providing a base for doing further research. Your questions are educated and pertinent.
Thank you for your feedback. I'm grateful that the channel gives me access to ask all the questions I want answered!
Can you ask Neos and do an interview on BTCI?
We're in discussions to do exactly that... :)
Thanks for the new idea. Great interview and letting your guest explain. Looking forward to next week.
Thanks for your feedback. Glad you enjoyed watching. I enjoyed making it :)
Thanks for an interesting interview and discussion about this new ETF.
You're most welcome!
I’m happy for Garrett. He seems like a nice guy straight shooter, and is always a good interview. I’m glad his fund is over 2 billion. I bet he’s over the moon about the success of his company (even if he’s not the most emotive guy 😂)
I like interviewing him because I can ask him anything and he always answers. When I ask him about AUM, he actually doesn't like to brag about it...but I mention it because I think he deserves some recognition.
Great interview and i probably need to watch it once more to fully grasp the concept. I did miss your summary at the end on your intentions to buy now or wait?❤
There was a lot to cover! It's a new fund and a new strategy so I'm going to wait before jumping in. Looks good but I want to see more data/history.
Enjoyed this interview and the one you did with Dave, so thank you. The real estate ETF sounds interesting, as there aren't many sector covered call ETFs in the market currently. PS. In the interview with Dave you could've mentioned NZ as well as Papua New Guinea (places close to Australia) : )
I was thinking the same thing. Technically, PNG is much closer to the Australian mainland than NZ. However, 3 hours to NZ is pretty close. I agree...I should have included NZ as a "close" country.
Like the interviews with Garrett! Thank you for an informative video, again.
Glad you like them!
Another great one! Thank you!
Glad you enjoyed it!
I've watched this video 3 times. Tomorrow I'm going to reduce my QQQI and SPYI positions and add HYBI. My risk tolerance is shrinking (retired) and QQQ and SPY are too expensive for me.
Thanks for sharing. HYBI is still new but I'm keeping an eye on it because I'm looking for something less volatile than the overall market.
Great job. Bought $1K days after it released... now dropping in $50K shortly.
You're quick on the draw! It's a new strategy for me so I'll wait a bit longer. I expect it to remain steady so it's not like I need to get in early before it "takes off".
@armchairincomechannel
I have CDs which matured and many more to come; NEOS has proven track record and I need some diversity in my income factory. Cheers.
Garrett is the man.
I like that he answers anything I can throw at him!
thanks for the analysis. Any chance you could circle back to CSWC?? Just took a dive on news of convertible notes offering and a meh report. How will that affect the company moving forward with falling interest rates?
Thanks for the suggestion. I noticed the same thing and will be looking for clear signals as to whether it's a buying opportunity.
Hey Armchair- I began watching the interview for the second time. Did he ever mention if as a mutual fund options were being used? Or is that something new that Neos added on?
Thanks for watching twice! The addition of the options strategy is a new feature introduced by NEOS.
What is the purpose of the 1-5 reverse stock split?
I just requested the official explanation from NEOS, however, my assumption is that they did it because 1/ They inherited a low priced ETF when they took over the fund 2/ There's a minimum price required to maintain a listing on the exchange and 3/ The market has a more positive perception of higher priced funds. Note that there's no economic effect on shareholders.
@@armchairincomechannel Thank you for your response. I follow the Neos Funds closely and was also surprised by the lack of an announcement. I had assumed they would have completed all necessary housekeeping before the fund's release.
I agree that a higher priced fund often carries a positive perception. However, I share your sentiment regarding reverse splits. While there's no direct monetary impact, they often convey a negative message.
What caused HYBI to jump $40 dollars in one day (Dec 27, 2024)? Closed on Dec 26 at $10.26; opened on Dec 27 at $51.26; why?
It went through a reverse 5:1 split. No change to the economics. It was simply to adjust the price from what's normal for a mutual fund (which it used to be) to what's normal for an ETF.
Why would the fund do a 1 to 5 reverse split after inly 2 months?
The split was because it transitioned from a mutual fund (typically trade at a lower price) to an ETF (typically trade at a higher price). There's no economic effect to shareholders.
@armchairincomechannel are you waiting for more history to consider this etf? I like the investment ideas but like more of a time-line. K8nd regards.
Very good interview! Great episode on a new products class! But we have similar ETF in Canada since about 2 years …😉😉
Thanks for the feedback. Canada has some nice options for income investors (if you're ok with Canadian dollars).
@ effectively! Btw, you made me smile when you said that you don’t like the Italian cold winter… I better understand now why Canada wasn’t on your wish list to live in during retirement !! 🤣🤣🤣🥶🥶🥶🥶
Great interview.
Thanks! Glad you enjoyed it.
Great video. Nice job! For expats and who just can use taxable account, funds not tax efficient isn't a good option.
Glad you enjoyed it. Thanks for watching.
Great interview thanks
Glad you enjoyed it!
Would love to see the volatility difference in a bond plus fund between using options , and using leverage instead ?! and which asset is riskier.. high yield bonds, or preferreds ?
GBAB needs your inspection insight for you to comment on .. lower credit risk using mostly taxable muni's, combined with leverage.
Those are good questions. I'm not familiar with GBAB but applying leverage to lower credit risk assets is an interesting idea and the yield is good. Looks like rising interest rates crushed it in recent years. If/when it shows signs of a substantial recovery it might be worth looking into.
Something a bit unrelated. I also big tennis fun and love playing tennis while travelling. Probably you can share some of your tennis/travelling experience. I am particularly very interested in tennis friendly locations, where it is possible to find good quality adorable tennis courts and friendly tennis crowd.
I have played tennis in many countries and haven't yet found a tennis crowd that's not friendly! The channel is about income investing so I won't be covering tennis in any detail. But if I attend a Grand Slam, I'll be sure to mention it.
Is it getting difficult to remember when 8.7 % was high yield stuff ? I was disappointed when the first distribution was announced.
The real estate fund sounds like it could be interesting.
The markets feel a bit uncertain, for obvious reasons.
always good to see you. You've got the best show on RUclips, when it comes to sustainable high yield investments.
Thanks Norman. Hopefully this video explained the many differences between HYBI and SPYI, and how the yield is achieved.
@armchairincomechannel I understand the differences. What I was hoping for, was a similar Yield.
Just saw HYBI will be reverse splitting at close of trading today December 26th. Do we know why this is being done? I can't find any information to answer this question.
I haven't spoken to NEOS about it but here are my assumptions: 1/ They took over the fund from another manager so the price was something they inherited 2/ There are minimum price requirements to remain on the exchange and there's a perception that higher priced funds are of higher quality than those at the bottom of the price range. 3/ I assume NEOS wanted to price this fund such that it is in a similar range to its other funds. The reverse split has no effect on the economics of the investment. I think its more about market perception.
Another banger!
Thanks for the encouragement :)
So if this fund was a mutual fund just renamed technically it’s not new at all. Chart goes back a good bit. If I’m understanding Garrett they kept the same formula or way that the fund originally was run, is that your take too?
They changed the mutual fund to an ETF, that's a minor change. The major change was adding the put spread overlay to increase the yield. So I wouldn't say it's the same as the previous version.
The high yield corporate bond ETFs are higher than you quote. USHY is 6.86% and SPHY, SCYB, PHYL, and SHYG are 7-8%. I'm in these "chasing" rates for income. So how much more does HYBI pay for me to want to pay a 0.68% fee? I would want to see a lowering of the risk, not increasing rate.
Do you have experience with CEF,s like BCAT, GGN, BCX, BSTZ, ...
@@edmitiu7383 Closed end funds? No. Don't recognize these tickers.
HYBI pays about 2% more than USHY and it's active management is designed to reduce the HYBI volatility to less than the USHY volatility. To pay the 0.68% you'd have to see value in earning the extra yield and experiencing less volatility. That's a personal choice.
I like the yield & tax efficiency, but it seems like the SPX options overlay defeats the purpose of bonds in a portfolio, since they would bleed value in a prolonged bear market.
Thanks for your feedback. That's a good point. I don't think the SPX options will move the needle significantly but it will depend on NEOS' ability to manage those put spreads during a bear market.
Good interview! On a different topic, Got a take on HESM earnings miss for the 4th straight quarter???
I haven't been following HESM since I sold it. I would look at it again after the acquisition, and the insider selling comes to a halt.
Can a comparison be done between HYBI and TLTW please? Are they competitive or complimentary? Would owning both offer some diversification in income sources, from different providers and there different traders, and slightly different strategies? e.g., TLTW buy 2% OTM Calls and it sounds like HYBI buys 5-8% OTM Calls and reviewed weekly.
Thanks for the suggestion. They are quite different. HYBI is more active and can adjust to market risk. Also, it doesn't come with the long duration risk of 20 year treasuries. It looks to me like TLTW requires more market timing to succeed than HYBI.
Nice work could be great to add to a portfolio with out any FI
Thanks for watching :)
Hey mate, love your content! Investor from NZ here hoping to be able to do what you do in the next few years. I had a question about currency hedging. For those that invest soley in US assets denominated in USD but live outside the US, what methods do you have to hedge from a drop in the USD?
I don't hedge against the USD. I tried holding some Canadian dollars for a while and some Australian dollars and got burnt on both. Even though the USD isn't always strong, as the reserve currency, it tends to win most of the time. So I've found the USD to be easier and better for spending in Asia. The problem with holding other currencies for extended periods is that I'd need to invest them to generate income and I prefer to invest in the US. More choices, more transparency, than most other markets.
@@armchairincomechannel Thats a great point! I've tried looking for liquid income generating positions in those currencies, best I could find was HYLD and AYLD, would you ever consider those as small positions?
You should have mentioned that you were involved in another video that came out today. 😉
Where?
You're right! But that one was recorded AFTER this one. The other one was on Dave's Wealth Adventures channel.
Hi, great video, just a question off topic, in retirement do you hold 100% of your money in these income investments (in the stock market) or do you have cash like an emergency fund, thanks
I went into detail in an old Q&A video but the short answer is "No". I have no debt, low expenses, plenty of insurance, and plenty of access to credit (via credit cards that I pay off in full) if there was an emergency. As an income investor I can calculate the opportunity cost of sitting on cash and...it is very expensive! The right thing to do also depends on personality. If X months of living expenses in cash helps you sleep better at night then that has a value too.
Many thanks, I am new to your channel and haven’t watched them all yet, only if you remember what video that was in I will watch it, yes agree 100% about the sleeping at night,
That's great 😊
Glad you think so!
BCAT, with1479 holdings!! 230% turnover!! is truly an ''active managed fund''...did I mention 21% yield backed by 10,trillion dollar Blackrock.
BSTZ, with a healthy amount private placement is another holding I like.
Closed End Funds are an ideal retirement vehicle.
I don't hold those 2 but I have BST. BCAT's yield recently has been high but that's because they changed their policy to distribute a high percentage of NAV regardless of investment income. That's unlikely to be sustainable for the long term. It's doing well now though.
@@armchairincomechannel BCAT, actively trading in thin markets reminds me of Bill Gross.
BSTZ, private investments looks like the next ESG....we could just follow along with old marketing but where is the fun in that.
HYBI just did a 5-1 split…why??
I just requested the official explanation from NEOS, however, my assumption is that they did it because 1/ They inherited a low priced ETF when they took over the fund 2/ There's a minimum price required to maintain a listing on the exchange and 3/ The market has a more positive perception of higher priced funds. Note that there's no economic effect on shareholders.
@ thank you for sharing that information. I guess I will just hold my investment for now and see how it does.
Although…he certainly didn’t mention anything of that nature when he was in your program. If I remember right he just talked about how stable it was.
Great interview, interesting tactical strategy . Curious about de risking element as that move to the agg or treasuries would decimate yields.
If high levels of income is your primary goal, will this fund would meet that objective over the long term.
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Good question. It comes down to how long the fund needs to stay in the low risk allocations. Or perhaps it's a matter of buying it when their model says "risk on". I'm going to give it some more time before I jump in.
High Yield = Junk Bonds. There is a reason why the yield is high, because the risk is higher. There is no free lunch in Wall Street.
Currently credit spreads are tight. From my understanding this means that junk bonds have a low risk of defaulting. Once credit spreads increase, then it's time to jump ship.
@@SomeUserNameBlahBlah I don't think that sounds right. The rating of bond quality should be irrespective of what the interest rate is. The market rate spread is determined by the open market, on how much someone is willing take on for for a particular bond risk vs another bond (such as Treasury). High yield just sounds nicer... vs junk bonds sound risky. However, they are exactly the same. The narrowing of the rate spread just means someone "thinks" the spread is enough risk to take on vs something with less risk. For ~8%... there might be better choices like an ETF comprised of basket of BDCs or preferred shares. Or, I do like NEOS' QQQI, which yields ~15% but it assumes tech doesn't crash. If there is a serious recession, a lot of those high yield bonds will be worthless.
Yes, more yield comes with more risk, or at least a different risk. Given that HYBI is actively managed, I would argue that it is less risky than just buying a regular high yield corporate bond ETF. The recent shift to short term treasuries is an example. If you look at historical default rates for high yield bonds, the risk is higher than for investment grade, but so is the reward. It's depends what your goals are. Also, you have to multiply the default rate by the collection rate, as the creditors often receive their share of the remaining secured assets in a bankruptcy. Plenty of people have made decent returns on junk bonds but I wouldn't go all in on them.
"Junk bond" is a misnomer. All that means is that the bond is from a corporation that is considered "non-investment grade" by rating agencies. Do you own any equity positions in mid cap or small cap stocks in your retirement accounts? If so, guess what? You are an equity investor in non investment grade companies and therefore, from an accounting perspective, are actually taking more risk than somebody investing in a so called "junk bond".
@@danstevens64 While I somewhat agree to the possible creditworthiness of some a small to mid-cap companies as in junk category. I disagree with comparing equity investments vs fixed income investments. Junk bonds are in the fix income category, while equity in small to medium stocks are completely different investments. IMO, that's intellectually inaccurate comparison.
Will you be adding HYBI to your portfolio?
Good question. It's a new strategy so I I'll watch it closely for a little while before investing. I didn't wait long before investing in QQQI because it's the same as SPYI, except a different index. If HYBI does its job it will remain a steady ship so no rush to get in before it "takes off".
Waaaaay too new to be of any use. I'm not interested in a fund manager's take on what a fund will do when it's a month old.
I'm waiting for more data/history before buying HYBI because it's so new. So I agree with you on not jumping into something without data. However, I still want to know what the fund manager expects their fund to do in the best and worst scenarios. Perhaps I can interest you in my review of ARCC...they have a 17 history to consider.
@@armchairincomechannel Thanks, I'm already knee-deep in ARCC . . . and have been loving it!
hello
Thanks for watching.
Great Interview.
Thanks, glad you liked it!