NEOS Real Estate High Income ETF (IYRI): A Tier Four ETF

I still believe real estate deserves a place in every retirement portfolio.

I just don't believe I need to own individual REITs anymore.

At one time, I owned companies like Realty Income (O) and Agree Realty (ADC). They're outstanding businesses, and I continue to have tremendous respect for both companies.

Over time, though, I found a solution that fit my retirement strategy even better.

Rather than owning a handful of individual REITs, I now prefer owning a diversified portfolio of real estate companies through IYRI while benefiting from a more tax-efficient income strategy.

That's why IYRI has earned a permanent place in my Tier Four portfolio.

Key Statistics

Ticker: IYRI
Tier: Tier Four
Investment Style: Real Estate High Income
Fund Inception: January 14, 2025
Expense Ratio: 0.68%
Assets Under Management: Approximately $290 million
Underlying Exposure: U.S. REITs
Distribution Frequency: Monthly

IYRI is an actively managed ETF that combines a diversified portfolio of publicly traded U.S. REITs with a covered call strategy designed to generate high monthly income while maintaining exposure to commercial real estate.

Why IYRI Fits Tier Four

Tier Four is designed to enhance the retirement income already built through Tiers One, Two, and Three.

The objective isn't replacing your dividend portfolio.

It's diversifying where your retirement income comes from.

Real estate has long been an excellent source of dependable income.

IYRI allows me to maintain meaningful exposure to that asset class while also adding another income stream through covered calls.

That's exactly the role I want this ETF to play.

What Does IYRI Own?

IYRI owns a diversified portfolio of publicly traded REITs representing many different areas of commercial real estate.

Instead of concentrating my investment in one property type, I gain exposure to businesses involved in:

Industrial warehouses
Data centers
Apartment communities
Shopping centers
Healthcare facilities
Self-storage
Cell towers
Commercial office properties

Some of the companies held by the fund include names like Realty Income, Prologis, Equinix, American Tower, Digital Realty, Public Storage, and Simon Property Group.

Instead of asking which REIT will outperform over the next decade...

I simply own the sector.

Where This Income Comes From

IYRI generates income from two different sources.

First...

The REITs inside the portfolio collect rent from tenants occupying commercial properties.

That rental income ultimately becomes dividends paid to shareholders.

Second...

The fund writes covered call options on real estate ETFs.

Other investors pay IYRI for the opportunity to potentially buy those investments at a predetermined price.

Those payments are called option premiums.

The fund keeps those premiums whether the options are exercised or not.

By combining REIT dividends with option premiums, IYRI produces a larger monthly income stream than relying on rental income alone.

Why I Like IYRI

One question I occasionally receive is why there aren't any REITs among my 50 DGI Crab stocks.

The answer is simple.

There used to be.

I owned individual REITs like Realty Income and Agree Realty because I admired both businesses.

Today, I prefer IYRI for one primary reason:

Tax efficiency.

When you own individual REITs in a taxable brokerage account, much of the dividend income is generally taxed as ordinary income rather than as qualified dividends.

IYRI's option-based strategy has historically allowed a significant portion of its distributions to be classified as return of capital (ROC). While the exact tax character can vary from year to year and isn't guaranteed, return of capital generally isn't immediately taxable. Instead, it reduces your cost basis, potentially allowing taxes to be deferred until you eventually sell your shares.

For me, that's a meaningful advantage in a taxable account.

The diversification is an added bonus.

Instead of owning two REITs...

I own dozens.

Instead of relying solely on rental income...

I also benefit from option premiums.

I didn't stop investing in real estate.

I found a more tax-efficient way to own it.

Who Is This ETF For?

IYRI is ideal for investors who:

Are building a Tier Four portfolio.
Want exposure to commercial real estate.
Prefer not to research individual REITs.
Appreciate tax-efficient income strategies in taxable accounts.
Want monthly income from multiple sources.

For me, IYRI has become my complete real estate solution.

Final Thoughts from the DGI Crab

Real estate remains an important part of my retirement portfolio.

That hasn't changed.

What has changed is the vehicle I use to own it.

Instead of concentrating my investment in individual REITs, I now prefer a diversified portfolio of commercial real estate combined with an option strategy designed to produce tax-efficient monthly income.

For a Tier Four DGI Crabber, that's a compelling combination.

Commercial real estate. Diversification. Monthly cash flow. Potential tax advantages. And another dependable retirement income engine.

If I had to summarize IYRI in one sentence, it would be this:

Own America's commercial real estate through a diversified, tax-efficient income strategy.

That's exactly why IYRI has earned its place as one of my favorite Tier Four ETFs.

DGI Crab Summary

Role in the Portfolio: Diversify retirement income through commercial real estate.

Where This Income Comes From: Rental income generated by a diversified portfolio of REITs plus option premiums collected through the fund's covered call strategy.

Should This Replace My Tier Three Holdings? No. Tier Four is designed to enhance the dependable dividend income you've already built in Tiers One through Three. The exception is investors beginning their investing journey later in life, where building around high-quality income ETFs and reinvesting distributions through DRIP can be a practical way to grow retirement income.