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Add More Income to International Investing With This Options ETF

BY | ETF Database
8:13 am ET 09/21/26 | 16 VIEWS
As measured by the widely followed MSCI EAFE Index, international developed market equities are quietly having a solid year. That’s because that gauge is up 11% since the start of 2026.Alone, that’s adequate reason to consider the NEOS MSCI EAFE High Income ETF (NIHI), but there’s more to the story. As advisors and experienced investors know, an array of ex-U.S. developed markets carry higher dividend yields than the paltry 1.1% found on the S&P 500. NIHI, which turned a year old earlier this month, adds to that proposition. The NEOS ETF, which sports a 30-day SEC yield of 2.73%, does so in easy-to-understand fashion. The actively managed NIHI simply holds a popular MSCI EAFE-tracking ETF, employing a "data-driven call option strategy” to generate income.NIHI May Be a Smart Income BetActively managed, the $204.4 million NIHI is an income ETF to consider heading into year end — and for multiple reasons at that. First, as noted above, the income investors are earning from basic domestic equity strategies is leaving something to be desired. Second — and compounding that issue — is the fact that U.S. Treasury yields are high and the Federal Reserve could have one more rate hike in store before 2026 ends, indicating there’s ample risk for fixed income investors. That turns the spotlight on NIHI, which as an options-income ETF, isn’t sensitive to Fed policy. Additionally, NIHI can serve as a portfolio diversifier at a time when U.S. stocks control massive percentages of global indexes. “To me, the US share of global equity market value is a cause for concern. It currently exceeds 60%, up from 40% in 2008. That’s well out of proportion to the US share of the global economy at roughly 25%. While those numbers need not align, they feel out of whack,” noted Dan Lefkovitz of Morningstar. NIHI’s diversification properties stand out for another reason. Some investors are flocking to emerging market stocks and ETFs, which have become increasingly technology-heavy due to the artificial intelligence trade, implying high correlations to U.S. equities. Conversely, the MSCI EAFE Index devotes more than 45% of its weight to financial services and industrial stocks, confirming it has value tendencies and the ability to diversify growth-centric portfolios. NIHI accomplishes that objective while delivering monthly income that’s well in excess of both the S&P 500 and the MSCI EAFE Index. For more news, information, and analysis, visit the Tax Efficient Income Content Hub.

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