CSHI is the NEOS Enhanced Income 1-3 Month T-Bill ETF — previously named the NEOS Enhanced Income Cash Alternative ETF until January 2024 — an actively managed fund launched August 30, 2022. CSHI holds a portfolio of 1–3 month U.S. Treasury bills as its core position and layers a systematic SPX index put spread options strategy on top to generate additional monthly income beyond what T-bills yield alone. With approximately $1.01–1.10 billion in assets and a 52-week price range of just $49.40–$49.94, CSHI behaves like a cash equivalent in terms of NAV stability while delivering a yield that has historically exceeded plain T-bill ETFs by a meaningful margin. Current grade and live metrics are on our free grading dashboard, updated every market day.

What Is CSHI?

CSHI is an options income fund built on the most conservative possible foundation: short-term U.S. government debt. At least 80% of the fund's assets are held in 1–3 month Treasury bills or ETFs that invest substantially in 1–3 month T-bills. Treasury bills are the shortest-duration instruments issued by the U.S. government and carry essentially no credit risk, no meaningful interest rate sensitivity, and negligible price volatility. Their yield tracks the prevailing federal funds rate environment closely — when short-term rates are high, T-bills yield well; when rates fall, T-bill yields fall with them.

On top of that T-bill base, NEOS's team runs an active SPX index put spread strategy designed to generate additional income each month using Section 1256 qualifying options. The result is a fund that seeks to provide T-bill-level capital stability with a yield enhancement above what T-bills alone offer — making it a genuinely differentiated cash alternative rather than simply another T-bill ETF. CSHI is one of the earlier funds in NEOS's options income family, launched before SPYI, and it has grown to over $1 billion in assets, reflecting sustained demand for yield-enhanced cash management solutions.

How CSHI's Put Spread Strategy Works

CSHI's options overlay is importantly different from the covered call overlays used in NEOS's equity income funds. Rather than selling call options on an underlying equity portfolio, CSHI sells and buys SPX index put options to generate income from the S&P 500 options market without holding S&P 500 equity exposure in the portfolio. The T-bills serve as the collateral base that secures the put spread positions — hence the "cash-secured" nature of the strategy.

A put spread involves selling a put option at one strike price and simultaneously buying a put option at a lower strike price. The sold put generates premium income; the purchased put limits the maximum obligation if the S&P 500 falls sharply. NEOS's data-driven approach adjusts the specific strikes, spread widths, and overall positioning each month based on market conditions and implied volatility in the SPX options market. The strategy is designed to generate a positive return in rising and flat equity market environments — when the put options expire worthless and the full premium is retained — and may generate a positive return in modestly declining markets if the premium collected exceeds the loss on the short put position. In a severe equity market selloff where the S&P 500 falls dramatically, the short put position can generate losses that partially offset the T-bill income, which is the primary risk to CSHI's income stream (not to its capital base, which remains in T-bills).

Because the options positions use SPX index options — broad-based index options that qualify as Section 1256 contracts — the income generated by CSHI's options overlay receives the favorable 60/40 capital gains tax treatment rather than ordinary income treatment. NEOS also actively employs tax-loss harvesting on both the T-bill and options positions to further optimize the after-tax income profile.

Section 1256 Tax Treatment and Return of Capital

CSHI's SPX options overlay qualifies for Section 1256 treatment, delivering the 60/40 capital gains split on option-related income and losses. At the 37% ordinary income bracket, this translates to an effective blended rate of approximately 23.8% on the Section 1256 component — a meaningful improvement over the 37% that would apply if the same income were classified as ordinary income. For a fund operating as a cash alternative where after-tax yield relative to money market alternatives is the central comparison, the Section 1256 advantage can represent a real after-tax income improvement of 1–2 percentage points annually for higher-bracket investors.

NEOS has reported that approximately 23% of CSHI's distributions have been classified as return of capital in recent periods, adding a modest additional layer of tax deferral. The T-bill interest component of distributions is interest income exempt from state and local income taxes in most U.S. states — an advantage over money market funds holding other instrument types and over corporate bond alternatives. Tax treatment can vary year to year. Consult a tax professional for your specific situation.

NAV Stability: The Defining Characteristic

CSHI's most distinctive feature — and the one that most sets it apart from every other fund on our dashboard — is its extraordinary NAV stability. The 52-week price range of $49.40–$49.94 represents less than 1% total price variation over the full year. No other fund in our 30-fund tracking universe comes close to this level of price stability. This near-zero price volatility is the direct result of the T-bill underlying: 1–3 month government bills have negligible interest rate sensitivity and essentially no credit risk, so their prices simply do not move in the way equity, commodity, crypto, or long-duration bond positions do.

This stability makes CSHI genuinely useful as a parking allocation — a place to hold capital that is waiting to be deployed into other positions — while still collecting monthly income above the bare T-bill rate. It is also what makes CSHI function as a reserve position within a portfolio of higher-volatility covered call funds. An investor holding SPYI, QQQI, and BTCI as income positions can hold CSHI as the stable, low-risk cash component of the same income portfolio, collecting yield from T-bills plus the options overlay rather than leaving capital in a zero-yield savings account.

Key Risks

The SPX put spread overlay introduces a specific income risk that investors should understand clearly: in a severe S&P 500 market selloff, CSHI's options positions can generate losses that reduce the monthly distribution below the T-bill baseline or, in extreme scenarios, temporarily reduce income to zero. The capital base in T-bills is not at risk — the T-bills themselves will still be worth par at maturity — but the income supplement from the options overlay can be impaired during equity market crashes. This is a different risk profile from a pure T-bill fund, where the income is the T-bill yield and does not depend on equity market behavior at all.

CSHI's yield is sensitive to the federal funds rate. When short-term rates fall — as they do when the Fed cuts rates in response to economic weakness — T-bill yields compress and CSHI's base income falls accordingly. The SPX options overlay can partially offset this compression if equity volatility remains elevated, but in a low-rate, low-volatility environment, CSHI's total yield can fall meaningfully from what it delivers in a high-rate, higher-volatility environment. Investors relying on CSHI for a specific income target should model how that income changes across rate scenarios.

The 0.39% expense ratio is modest for an actively managed options-overlay fund and is consistent with NEOS's other products. At $1+ billion in assets, CSHI has sufficient scale for reliable secondary market liquidity and long-term operational viability. The fund's active management means outcomes depend in part on NEOS's ongoing judgments about put spread construction — a form of manager risk that does not exist in a passive T-bill ETF.

Who Should Consider CSHI?

CSHI is built for investors with capital that would otherwise sit in a money market fund, high-yield savings account, or plain T-bill ETF — and who want to extract additional monthly income from that idle cash without taking on equity market risk to their principal. The T-bill base ensures the principal is essentially safe. The SPX put spread overlay adds yield above that safe base at the cost of making the income supplement somewhat variable with equity market conditions. For investors who are comfortable with that income variability — and who understand that in a severe market crash the options income may temporarily disappear while the T-bill principal remains intact — CSHI delivers a genuinely useful yield enhancement above the risk-free rate.

CSHI is also a natural component of a diversified covered call income portfolio as the conservative, stable-NAV anchor position. An investor running a higher-yield, higher-volatility income portfolio of equity and crypto covered call ETFs can use CSHI to hold their reserve capital productively rather than leaving it in cash, while keeping the capital available for redeployment as opportunities arise. Browse all Treasury income ETFs at our Treasury Covered Call ETFs category page, or return to the ETF Fund Directory.

CSHI occupies a genuinely unique position in the income ETF universe — it is the only fund in our 30-fund tracking universe with near-zero NAV volatility, serving as both a yield-enhanced cash alternative and a natural portfolio stabilizer alongside higher-risk income positions. The T-bill base provides principal safety that no equity, commodity, or crypto covered call fund can match. The SPX put spread overlay on top adds monthly income above the risk-free rate through a Section 1256 qualifying strategy that delivers meaningful after-tax efficiency. And NEOS's active tax-loss harvesting adds another layer of income optimization that passive T-bill alternatives cannot replicate.

The core caveats are the SPX options income risk in severe equity downturns — the principal is safe but the income supplement can be impaired — and the rate sensitivity of the T-bill base yield in falling rate environments. Investors who understand those nuances and are using CSHI as an intelligent cash alternative or portfolio reserve will find it delivers on its core promise consistently. Since inception in August 2022 through a challenging rate environment, CSHI has delivered an average annual return of approximately 5.51% with a 52-week price range of less than 1% — a track record that speaks clearly to the fund's design intent.

Track CSHI's current grade and live metrics on our free dashboard, updated every market day.

⚠️ Tax Note: Tax treatment shown is general guidance only and may vary year to year. Treasury bill interest may be exempt from state and local income taxes in many jurisdictions. Section 1256 treatment applies to the SPX options overlay; the T-bill component may be characterized differently. Consult a tax professional for your specific situation.

⚠️ Disclaimer: CoveredCallETFHQ is for informational purposes only and does not constitute financial advice. All data sourced from Yahoo Finance. Grades and scores reflect our proprietary methodology and should not be used as the sole basis for investment decisions. Past performance does not guarantee future results. Always consult a qualified financial advisor before investing.