MLPI vs SPYI: Which Is the Better Pick in 2026?

Overview

MLPI and SPYI are both NEOS-issued ETFs that generate high monthly income through options-based overlay strategies, but they target fundamentally different underlying markets. Both charge identical 0.68% expense ratios and distribute monthly, but differ sharply in asset base, yield, and the tax dynamics of their respective strategies.

How they differ

MLPI's 14.72% distribution rate exceeds SPYI's 11.95%. SPYI, with $12.4B in assets under management versus MLPI's $46.4M, has achieved mainstream scale since its 08/29/2022 inception, while MLPI launched far more recently on 12/18/2025, giving it minimal operating history. A third distinction lies in exposure: SPYI tracks the S&P 500, a diversified large-cap index, while MLPI concentrates on energy infrastructure partnerships, introducing sector-specific volatility.

Who each is best for

MLPI: Fits investors seeking maximum current income from energy infrastructure, comfortable with the seasonal and cyclical nature of MLP cash flows and prepared to manage the ordinary-income tax character of distributions.

SPYI: Designed for investors wanting high monthly income from broad equity exposure while prioritizing tax efficiency and accepting that covered-call strategies may cap upside participation in sustained rallies.

Key risks to know

• NAV erosion potential: MLPI's 14.72% yield is substantially higher than the historical trailing total return of MLPs, raising the question of whether distributions will include return of capital and gradually erode net asset value over time; SPYI's 11.95% is similarly elevated relative to historical S&P 500 returns and suggests comparable NAV pressure.

• Energy sector and financing cycle risk: MLPI's underlying MLPs are highly sensitive to commodity prices, interest rates, and refinancing costs; a sustained energy slowdown or widening credit spreads could force distribution cuts and trigger significant price declines.

• Options-related NAV drag: Both funds employ options overlays that generate income but cap gains in bull markets; this structural dynamic compounds the question of whether high distributions are supported by underlying economic yield or rely on principal decay.

• Tax-inefficiency mismatch: MLPI's MLP distributions trigger ordinary income and partnership K-1 reporting complexity, creating administrative friction; SPYI's ordinary-income character from options premium is more predictable but still not capital-gains-efficient.

Bottom line

If maximum current income from energy infrastructure is the priority, MLPI offers the higher initial yield; if you want high income paired with broad equity diversification and a tax-efficient framework, SPYI presents a different strategic profile. Both strategies face the structural question of whether elevated distributions can be sustained without gradual NAV erosion—a tension worth examining against your time horizon and tax situation. Past performance does not predict future results.