My first IWMI purchase was on 30 Jan 2026. I built the position mostly through daily recurring buys, plus one one-off order and two reinvested payouts. This post sets out what I bought, what it paid me and how it has done up to 14 Oct 2026.
Read on for the full numbers.
Quick Verdict
IWMI’s monthly payouts have more than covered a small fall in its share price. Up to 14 Oct 2026, my position is up 1.4% after tax once payouts are counted. Payouts per share have stayed in a narrow range.
What Is IWMI and How Does It Work?
| NEOS Russell 2000 High Income ETF (IWMI) | |
|---|---|
| Inception date | 24 Jun 2024 |
| Underlying exposure | Russell 2000 Index |
| Total expense ratio | 0.76% (0.68% management fee + 0.08% acquired fund fees); net expenses capped at 0.68% until 1 May 2027 |
| Distributions | Monthly |
| Net assets | $1.29 B (13 Oct 2026) |
| Domicile / ISIN | US / US78433H6348 |
IWMI holds small-cap US stocks. NEOS says it invests in “the constituents of the Russell 2000 Index”. On 15 Oct 2026 nearly all of it (98.37%) sat in the Vanguard Russell 2000 ETF (VTWO).
It sells index call options for income. NEOS describes a “data-driven call option strategy” that “may include both sold and purchased” Russell 2000 (RUT) index options. These options are “classified as section 1256 contracts, which are subject to lower 60/40 tax rates”, and the fund also looks for tax-loss harvesting opportunities. Holding some purchased calls is meant to leave room for “upside capture in rising equity markets”.
Tax character of the payouts. NEOS says IWMI’s distributions “have been classified as a return of capital”, with an estimated breakdown in its monthly 19a-1 notices. These are estimates, and final reporting comes on Form 1099-DIV.
My IWMI Position
| Month | Buys | Shares bought | Cost incl. commission | Average price |
|---|---|---|---|---|
| Jan 2026 | 1 | 3.9848 | $200.38 | $50.29 |
| Feb 2026 | 20 | 75.7633 | $3,827.22 | $50.52 |
| Mar 2026 | 21 | 87.6444 | $4,207.99 | $48.01 |
| Apr 2026 | 12 | 48.4825 | $2,404.57 | $49.60 |
| Jul 2026 | 2 | 52.2266 | $2,778.09 | $53.19 |
| Total | 56 | 268.1016 | $13,418.24 | $50.05 |
| Value on 14 Oct 2026 | 268.1016 × $48.16 | $12,911.77 |
The buys break down as $10,620.17 of recurring buys (about $200 each trading day from 30 Jan to 20 Apr 2026), $2,661.64 for a one-off order of 50 shares on 7 Jul 2026 and $136.43 of reinvested payouts (two purchases). No shares have been sold, and the cost basis is the full $13,418.24 paid.
Payouts I Received
| Pay date | Per share | Shares | Gross | US tax withheld | Net |
|---|---|---|---|---|---|
| 20 Feb 2026 | $0.6018 | 47.4231 | $28.53 | $8.56 | $19.97 |
| 20 Mar 2026 | $0.5710 | 124.9746 | $71.36 | $21.41 | $49.95 |
| 24 Apr 2026 | $0.6120 | 215.8750 | $132.12 | $39.63 | $92.49 |
| 22 May 2026 | $0.6046 | 215.8750 | $130.52 | $39.16 | $91.36 |
| 18 Jun 2026 | $0.6277 | 215.8750 | $135.50 | $40.65 | $94.85 |
| 24 Jul 2026 | $0.6250 | 265.8750 | $166.17 | $49.85 | $116.32 |
| 21 Aug 2026 | $0.6373 | 268.1016 | $170.86 | $51.26 | $119.60 |
| 18 Sep 2026 | $0.6075 | 268.1016 | $162.87 | $48.86 | $114.01 |
| All payouts | $997.93 | $299.38 | $698.55 |
The withholding works out to 30.0% of every payout.
From February to May 2026, my broker (IBKR) lent out most of my IWMI shares to other investors. Because of that, almost all of my payouts in those months, $360.65 of the $362.53, came from the broker instead of straight from the fund. I still got the same amount per share, and the same 30% tax was taken off. The broker also paid me $57.69 for lending the shares, which isn’t included in the payouts table.
My Return So Far
| 30 Jan – 14 Oct 2026 | Amount | % of $13,418.24 bought |
|---|---|---|
| Value on 14 Oct 2026 | $12,911.77 | |
| Price change only | −$506.47 | −3.77% |
| Payouts before tax | +$997.93 | +7.44% |
| Return before tax | +$491.46 | +3.66% |
| US tax withheld | −$299.38 | −2.23% |
| Return after tax | +$192.08 | +1.43% |
| Securities-lending interest | +$57.69 | +0.43% |
| After tax, with lending interest | +$249.77 | +1.86% |
This counts all payouts, including the $136.43 that was reinvested, because the shares those payouts bought are already in the value. The percentages are on the total amount bought, not a time-weighted return, so they are not directly comparable with the fund’s published returns below.
IWMI’s Published Returns and Distribution Rate
| To 30 Sep 2026 | 3 months | YTD | 1 year | Since inception (annualised) |
|---|---|---|---|---|
| IWMI (NAV) | −5.25% | 12.00% | 16.31% | 14.98% |
| IWMI (market price) | −5.13% | 12.04% | 16.34% | 14.95% |
| Cboe Russell 2000 BuyWrite Monthly Index | −0.38% | 10.72% | 16.15% | 11.83% |
| Russell 2000 Index | −7.23% | 13.71% | 16.20% | 16.67% |
| Distribution measure (30 Sep 2026) | IWMI |
|---|---|
| Distribution rate | 14.60% |
| 12-month trailing distribution rate | 14.53% |
| 30-day SEC yield | 0.58% |
| Latest payout | $0.6075 |
NEOS works out the distribution rate as the latest payout × 12 divided by the latest ex-date NAV, so it is not a total return. The 30-day SEC yield is much lower because it is based only on income from the fund’s holdings, not option premium.
In Bad Times: Drawdowns and Payouts
| 30 Jan – 14 Oct 2026 | Peak | Trough | Max drawdown |
|---|---|---|---|
| IWMI, total return | 26 Feb 2026 | 30 Mar 2026 | −8.4% |
| IWMI, price only | $51.17 (9 Feb 2026) | $45.80 (30 Mar 2026) | −10.5% |
| iShares Russell 2000 ETF (IWM), price only | $305.09 (14 Aug 2026) | $271.37 (14 Oct 2026) | −11.1% |
The two worst falls came at different times. In the recent small-cap sell-off (14 Aug to 14 Oct 2026), IWMI’s total return was −8.0% against IWM’s −10.8%. IWMI’s own worst stretch was in March 2026.
Payouts held up. The lowest payout was $0.5710 a share in March 2026, during IWMI’s drawdown, and payouts have stayed between $0.57 and $0.64 a share since I started buying.
Tax: Withholding, Return of Capital and Estate Tax
For us in Singapore, IWMI payouts are subject to 30% US withholding tax, and as a US-domiciled fund IWMI also counts as a US asset for US estate tax (IRS). 30% was withheld from every payout, including the payments in lieu.
No return of capital has reduced my cost basis. NEOS classes IWMI’s distributions as return of capital, but says the monthly figures are estimates and that final tax reporting comes on Form 1099-DIV (NEOS). My cost basis is still the full amount paid, and no 2026 withholding has been adjusted so far.
Ireland-domiciled alternative? Nothing close: no UCITS Russell 2000 covered-call or income fund was found, including in the IncomeShares range.
| Alternative | Type | ISIN | TER | Payout | Closest to | Key difference |
|---|---|---|---|---|---|---|
| Vanguard Russell 2000 U.S. Small-Cap UCITS ETF USD Dist | UCITS fund | IE000LRGEN55 | 0.20% | Quarterly | IWMI (index only) | Plain Russell 2000, no options |
It writes no calls, so its payout is far smaller, and it only launched on 7 Jul 2026.
Summary of My Position
| 30 Jan – 14 Oct 2026 | Amount | % of cash paid |
|---|---|---|
| Cash paid | $13,418.24 | |
| Value on 14 Oct 2026 | $12,911.77 | |
| Payouts before tax | $997.93 | +7.44% |
| Payouts after tax | $698.55 | +5.21% |
| Securities-lending interest | $57.69 | +0.43% |
| Return of capital (basis reduction) | $0.00 | |
| Total return before tax | +$491.46 | +3.66% |
| Total return after tax | +$192.08 | +1.43% |
Conclusion
IWMI’s payouts have been steady and have more than made up for the small fall in its share price. It fell a little less than the Russell 2000 in the recent sell-off. If you are looking at IWMI for income, the share price still moves with US small caps.
Related
- How IAUI Performed Since I Bought It
- How MLPI Performed Since I Bought It
- How BTCI Performed Since I Bought It
As always, remember that Past Performance is No Guarantee of Future Results. And none of the content that I write on this site should be taken as financial advice.
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