IYR is up 13% year to date but pays a low single-digit yield, while IYRI converts the same REIT exposure into monthly distributions yielding nearly 11%. KBWY has surged 23% year to date, confirming the REIT rebound that the NEOS team behind SPYI harvests as income through IYRI's covered-call overlay. IYRI's call overlay caps price gains at 10% versus IYR's 13%, and 2026 distributions have drifted lower as softening volatility thins call premiums.
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Shares are up 12.77% year to date and 13.57% over the last twelve months, finally outperforming the broader market as capital rotates back into rate-sensitive sectors. If you own IYR for real estate exposure, that rebound is exactly what you signed up for. IYR is a passive index tracker, though, and its distribution yield sits in the low single digits.
Investors who bought a REIT fund specifically to collect income now have a specific alternative from the team behind the popular SPYI and QQQI covered-call ETFs, and it is currently paying a distribution rate near 11%. At its core, IYR does its job well. It offers clean exposure to the Dow Jones U.S.
Real Estate Index at a modest fee, and it has held up through a punishing rate cycle. With the 10-year Treasury at 4.63%, a REIT ETF paying roughly the same rate as government paper struggles to justify itself to income investors. IYR was built for total return, and its distributions come strictly from what the underlying REITs pay out.
There is no mechanism to boost payouts when volatility is elevated, which is precisely when income seekers most want the check to arrive. Enter the NEOS Real Estate High Income ETF (CBOE:IYRI). Launched on January 15, 2025, IYRI owns a diversified basket of major REITs, including Welltower, Prologis, Digital Realty Trust, and Simon Property Group, and then overlays a call options strategy to convert some of that portfolio's implied volatility into monthly cash.
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