IYRI ETF Secures $50.24 Price With 8.7% Yield as Fed Rate Cuts Revive Real Estate Income Play

NYSEARCA:IYRI ETF Secures 8.7% Yield as Fed Cuts Support Real Estate Income Play

IYRI ETF Trades at $50.24 With Narrow Premium to NAV

The NEOS Real Estate High Income ETF (NYSEARCA:IYRI) closed September 26, 2025, at $50.24, up 0.86%, before edging slightly lower to $50.16 after hours. The ETF has moved in a tight 52-week range of $43.74 to $52.49, with current levels reflecting relative stability despite volatility across broader equity markets. With net assets of $124.46 million and a 0.68% expense ratio, IYRI is still early in its lifecycle but has quickly gained traction with income-focused investors.

High-Yield Covered Call Strategy Generates 8.7% Payout

IYRI is structured as a covered call ETF targeting equity REITs. It invests primarily in large U.S. real estate names, including Prologis (PLD) at 7.75% of assets, Welltower (WELL) at 7.49%, and American Tower (AMT) at 7.01%, with its top 10 holdings making up nearly 49% of the portfolio. Instead of relying solely on dividend distributions, IYRI enhances income by writing call options against these positions. This overlay strategy allows the fund to deliver an annualized forward yield of 8.65%, far above the 1.7% to 3.6% range offered by its individual holdings. The August dividend payout was $0.457 per share, confirming strong consistency in monthly distributions.

Federal Reserve Cuts Add Tailwind to Real Estate Sector

The Federal Reserve’s 25-basis-point rate cut last week, lowering the federal funds range to 4.00%–4.25%, has created a fresh tailwind for real estate. REITs are capital-intensive businesses heavily reliant on debt markets, and lower borrowing costs directly improve acquisition economics. Unlike the 2020–2022 cycle, where falling long-term yields drove REITs sharply higher, the current environment remains more cautious, as Fed moves have primarily affected short-term maturities rather than long-dated financing rates. Still, lower rates improve sector stability, which supports IYRI’s ability to extract option income consistently.

Performance Lag vs. Category Benchmarks but Growing Appeal

Since inception in January 2025, IYRI has posted 0.00% YTD and 1-year returns, trailing its Derivative Income ETF category, which advanced 6.58% YTD and 12.12% over one year. On a three-year horizon, the category generated 10.56% annually, while IYRI’s short track record leaves it untested in full market cycles. Despite this underperformance, the ETF’s monthly income stream and 8.7% yield are driving adoption among income-focused investors, particularly those skeptical of a sharp REIT recovery.

Sector Allocation Heavily Concentrated in Real Estate Giants

IYRI’s sector exposure is overwhelmingly tilted toward real estate, with 98.66% of assets in the sector and just 1.34% allocated to communication services. Its largest allocations are to industrial and healthcare REITs, providing diversified exposure across property types. Notably, holdings like Equinix (EQIX) and Digital Realty Trust (DLR) tie the ETF directly to data center expansion, a fast-growing subsector benefiting from cloud and AI-driven demand. Traditional players such as Simon Property Group (SPG) and Realty Income (O) add retail and net-lease diversification.

Valuation and Premium to NAV Remain Manageable

The ETF currently trades at a slight 0.31% premium to its net asset value (NAV) of $50.19, a reasonable level that indicates demand without excessive froth. Its price-to-earnings ratio of 32x reflects the valuation profile of its REIT-heavy holdings, which often trade above broader equity multiples due to income stability. While upside potential is capped by the call-selling strategy, the ETF offers an income cushion that limits downside in sideways or moderately bearish environments.

Risks: Short History and Capped Upside

The main risks for NYSEARCA:IYRI stem from its short track record and the natural limitations of a covered call strategy. If REITs were to rally sharply, such as during a full-blown rate-driven bull market, IYRI would likely underperform peers due to option obligations limiting capital appreciation. Additionally, the ETF has yet to prove itself across multiple economic cycles. With just eight months of trading history and $124.46M in AUM, scale is still modest compared to established REIT ETFs like VNQ.

Final Outlook – IYRI Positioned as High-Yield Income Vehicle

The NEOS Real Estate High Income ETF (NYSEARCA:IYRI) offers a rare combination of 8.7% yield, monthly distributions, and long exposure to blue-chip REITs. Backed by holdings such as Prologis, Welltower, and American Tower, and amplified by a dynamic covered call overlay, IYRI provides an appealing option for investors prioritizing income in a market where REIT valuations remain constrained. With Fed rate cuts acting as a stabilizer, the ETF is best suited for those expecting real estate to trade sideways rather than surge. Based on current income strength, allocation quality, and Fed policy tailwinds, IYRI earns a Buy rating as an income-first play, albeit with capped upside in a bullish REIT recovery scenario.

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