This Gold ETF Turns a Non-Yielding Asset Into Monthly Income—But There’s a Catch

Key Points

• Gold has fallen more than 20% from its late-January record, yet the macro factors behind its multi-year rally remain firmly intact.
• The NEOS Gold High Income ETF (IAUI) uses a call option strategy on gold ETPs to provide monthly income alongside gold price exposure.
• IAUI reported an 11.98% distribution rate as of Aug. 31, but carries a relatively high 0.79% expense ratio and short-term volatility risk.

As gold trades more than 20% below its late-January intraday record, many of the macro conditions that fueled its multi-year rally remain in place. For investors who still see a long-term case for the precious metal, however, one drawback remains unchanged: gold itself doesn’t generate income.

Now, one exchange-traded fund (ETF) is looking to attract investors who may have avoided the asset due to its lack of yield.

Gold’s Price Drivers Haven’t Gone Away

Mounting government debt, record U.S. debt levels, persistent inflation, geopolitical unrest, weakness in fiat currencies, and continued central bank gold buying all helped fuel gold’s multi-year rally.

Cumulatively, those catalysts propelled the safe-haven asset to a more than 160% gain since the start of 2024 through its all-time high of $5,589.38 per troy on Jan. 28. But after six months of profit-taking and price consolidation, not only have those tailwinds not dissipated, they remain firmly in place.

The U.S. Bureau of Labor Statistics’ August Consumer Price Index (CPI) report showed headline inflation at 3.4% year over year (YOY). Energy has been a significant contributor to inflation, while supply disruptions tied to the Iran war, sharply reduced commercial traffic through the Strait of Hormuz, the shutdown of Saudi Arabia’s East-West pipeline, and disruptions in the Red Sea have helped keep oil prices elevated. The price of Brent crude—the global oil benchmark—is currently around $108 per barrel

As a result, energy commodity prices have risen by 28% YOY according to the most recent CPI report, with diesel prices in the United States currently sitting at a record high. The war between Russia and Ukraine shows no signs of subsiding, while weakness in the U.S. dollar—which is down around 13% from its five-year high—has also helped support gold prices.

Meanwhile, those global conflicts and the resultant inflation have incentivized increased central bank gold-buying, which has amounted to 130 tons through the first seven months of the year, according to the World Gold Council. Twenty-three tons of the precious metal were purchased by central banks in July alone, eight tons of which were purchased by the National Bank of Poland.

IAUI: The ETF Providing a Workaround for Gold’s Lack of Yield

While gold bugs have benefited from accumulating the physical metal for the past several years, owning the alternative asset has numerous disadvantages.

If it is kept in a gold IRA, it must be insured and stored with an IRS-approved custodian. It is less liquid than equities, and critically important to income investors, it doesn’t provide yield.

The NEOS Gold High Income ETF BATS: IAUI has set out to remedy that. Since its inception on June 4, 2025, the fund has aimed to offer monthly income through a data-driven call option strategy on gold exchange-traded products (ETPs).

The ETF couples that yield with share appreciation based on its exposure to physical gold through the aforementioned ETPs.

That strategy entails the following:

1. Investing up to 25% of the fund’s assets in gold ETPs primarily through a controlled foreign corporation and directly investing in gold ETPs.

2. Seeking to track the price of gold through a synthetic options strategy through the combination of purchasing call options and selling put options on gold ETPs with a notional value up to 75% of the fund’s net assets.

3. Providing high monthly income by utilizing a call options strategy, which primarily consists of selling call options on one or more gold ETPs with a notional value between 50% to 100% of the fund’s net assets.

4. Earning income from collateral in the form of U.S. government securities, such as Treasury bills, notes, and bonds.

That strategy has allowed the fund, which has around $615 million in assets under management, to closely mirror gold’s performance this year—specifically since the precious metal’s rebound, which began in late July, and its subsequent reversal, which began in late August.

But while the IAUI has lost nearly 5% since its August high, it has continued to provide shareholders with monthly income. As of Aug. 31, NEOS reported an 11.98% distribution rate and a 1.87% 30-day SEC yield. According to the ETF’s website, those payments have fluctuated between about 49 cents and 62 cents per share in 2026.

IAUI Adds Monthly Income to Gold Exposure

Generating yield alongside gold exposure is IAUI’s core appeal.

But because gold—which the fund tracks through gold ETPs and synthetic options—can be volatile in the short term, so, too, can the fund itself. Additionally, the IAUI carries an expense ratio of 0.79%, which places it toward the upper end of actively managed ETFs’ expense ratios.

But for shareholders who are comfortable with those conditions, the ETF could play a role in a diversified income portfolio that may or may not already have exposure to precious metals.

The IAUI is fresh off a one-month low, affording a strong entry point for yield-seeking investors as gold’s long-term price catalysts remain intact.