As the S&P 500 catches its breath after reaching new highs, it's an ideal time to get "Magnificent Seven" exposure amid the price dips. When you add tax-efficient income to the equation, you get an ideal scenario that also benefits fixed income investors with the actively managed NEOS S&P 500 High Income ETF (SPYI).
Fueled by strong earnings and the expectation of rate cuts, Magnificent Seven names like Nvidia, Microsoft, and Apple have been benefiting from the most recent S&P rally. Rising yield and inflation worries may be adding speed bumps, but the group has largely kept its momentum intact thanks to the centralized theme of artificial intelligence (AI).
"That strong performance begs a question: just how much higher can the Magnificent 7 rise? No one knows exactly how high but it’s certain that artificial intelligence (AI) will be the defining factor," Investor Place posits.
SPYI provides exposure to the S&P 500 Index via implementing a data-driven call option strategy. With its active management strategy, SPYI can allow for tailor-made holdings of the aforementioned Magnificent Seven and other stocks as parts of its holdings. This allows the fund to be flexible under various market conditions, irrespective of how the markets react to news.
The experienced portfolio managers can tailor the positions in the fund to suit current market conditions and/or use a call-laddering strategy, allowing risk mitigation to the downside and the ability to capitalize on any upside when the S&P 500 trends higher.
