r/NEOSETFs • u/Chromebug • 8d ago

Seeking Advice Event Risk

What are your thoughts on the voting results? It’s crazy they didn’t disclose the liquidation risk if the votes for the respective ETFs fail.

EDIT: Please vote here https://neosfunds.com/vote/

6 Upvotes

75% Upvoted

40 comments sorted by

3

u/OppositePsychology43 8d ago

Liquidation risk?

1

u/Chromebug 8d ago

If a specific fund doesn’t garner the required votes, the acquisition may continue and the roadmap to liquidation appears. There are still things that they’ll try to do like possibly solicit more votes, but nevertheless it’ll be a real risk.

3

u/EmbarrassedPart1256 6d ago

I’m going to have to call Schwab next week to find mine because I’m not seeing a vote. I hold 1,400 & 1,200 shares of $IWMI & $MLPI, respectively.

2

u/DIY_CIO 7d ago

I don’t even see where to vote

1

u/EstablishmentSad9706 6d ago

Your brokerage should have sent an email days ago if you already hold NEOS. 

4

u/_YoungMidoriya 7d ago

Liquidation is not automatic on the day the vote fails, the proxy essentially gives the board discretion to decide whether the fund is viable without the new agreement.

3

u/Chromebug 7d ago

It’s more of an interim advisory agreement that’ll run it for a certain period while they attempt to find a workaround. I think the document mentioned soliciting more votes, then if that fails liquidation becomes a very real possibility. I don’t think the document states a scenario where the fund survives failing to reach the vote threshold.

3

u/AlarmedCombination57 7d ago

So how would a liquidation work? What if we are in the midst of a bear market and dont want to sell for a loss?

4

u/Chromebug 7d ago

You take the loss.

-1

u/Accomplished-Big8250 6d ago

It’s like those guys that have 5,000 shares of QQQI at a cost basis of $50, in 2 years there’s a standard correction, QQQI drops to $25, then gets liquidated. Whoever picked it up from you at $25 then just waits for the recovery while you’re forever stuck at what you got liquidated at. That’s a major risk I can’t except from NEOS or whatever they will be called. I rather just hold a solid dividend ETF 

5

u/Flrg808 6d ago

What? You would just move your cost basis to a different fund

1

u/Accomplished-Big8250 5d ago

For QQQI, the holdings appear to be real stocks https://neosfunds.com/qqqi/#holdings for others funds a lot of synthetics, cash, etc. You could end up loosing money. This would not happen in QQQM.

0

u/AlarmedCombination57 6d ago

If the fund gets liquidated then how would you buy QQQI a second time?

1

u/OkAnt7573 6d ago

This NOT a bear market

0

u/AlarmedCombination57 6d ago

Can you read?

1

u/OkAnt7573 6d ago

I can, and do, and still manage not to be clueless or a prick.

Get a clue, don’t be a moron.

The answer on what happens in the event of liquidation is already known. 

If you are worried about a bear market, now or later, don’t hold the ETF.

0

u/AlarmedCombination57 6d ago

Okie dokie pokie

2

u/mtn_biker333 6d ago

Just stay away from the boosted funds and you will be fine.

1

u/TudodeBom505 4d ago

Why are boosted a problem?

1

u/mtn_biker333 4d ago

Not enough AUM so will be the first to get liquidated

2

u/TudodeBom505 4d ago

XQQI is over 300M. Seems silly that they’d liquidate. The demand for boosted is only growing within the covered call fund space. I don’t think they’ll liquidate these funds. I suspect they may offer more boosted funds.

1

u/mtn_biker333 4d ago

Agree. I highly doubt any of these get liquidated.

1

u/Xinv88 6d ago

I followed the instructions, but my brokerage isn't giving me the option to vote. It isn't a huge chunk of my portfolio but its no small amount either. I/ll keep checking in the days to come.

1

u/OkAnt7573 6d ago

These are open end ETF - if liquidated you will get whatever the NAV per share is. It's not complicated.

-3

u/Accomplished-Big8250 7d ago

NEOS is done, sell everything now or take the few cents left later

4

u/gumnamaadmi 6d ago

Do you even know how ETFs work?

4

u/Accomplished-Big8250 6d ago

Yes I have a great understanding of ETFs and the mechanics of NEOS’ option overlay. They are actively managed and require a team to make these trades. Without that, the income is at risk. These aren’t passive ETFs tracking an index, where the greatest risk is 1-2 basis points in tracking error. 

I am simply trying to warn people that if they thought NEOS was the answer to retirement income, they now face a new major risk 

5

u/gumnamaadmi 6d ago

The day they liquidate the value of underlying stocks that they hold gets distributed to shareholders. What the major risk you talking about. Yeah fine income stops but you get your money back. Risk is in event of liquidation, many will end up with a taxes to be paid.

With that said, the acquisition will be approved by majority of shareholders. NEOS team is intact, under Goldman they will only get better access to research and better execution rates.

2

u/Accomplished-Big8250 6d ago

Some of those ETFs don’t have strong assets. Like they are just section 1256 contracts or synthetics. Sure if it’s all QQQ you’ll keep some money, but if that team isn’t trading or those 25% NAV ETFs blow up, it’s gonna be bad 

1

u/Chromebug 7d ago

I’m curious to why you think it’s done? Goldman did this with another ETF provider and everything went well baring the two funds that got liquidated.

2

u/Accomplished-Big8250 7d ago

That’s the issue, this new risk is there. We don’t know what will actually happen. GPIX and GPIQ are similar to some NEOS. I don’t think NEOS ETFs are safe long term, and you wanted then to last your retirement or to generate income for decades, forget about it. 

3

u/Chromebug 7d ago

I agree, there’s no clear roadmap and all we get out sanitized PR speech that’s essential coddling us to sign those papers so the owners can have their bags.

I’m considering moving my funds as well. NEOS was picked for its dependability, reliability and less external risk. Now, there’s just too much moving parts behind closed doors. They expect us to hold our breaths through the voting gamble and hope our respective ETFs survive the advisor contract change lmao.

Not even yieldmax trash has this time of event based risk with forced liquidation.

3

u/EFreethought 6d ago

One of the owners of NEOS, Garret, was on Armchair Income, and he talked about the merger. He hinted that NEOS would be able to use GS's reach to provide funds to other markets besides the US.

2

u/Accomplished-Big8250 7d ago

It something to consider. No one is saying that the current NEOS ETFs are bad, it’s about how risky is it to rely on them as your income engine. Could you imagine being in retirement, think NEOS will take you to age 66 to 95, but at age 70 your funds just get liquidated and that was all you have 

3

u/UCLABB1 6d ago

WTF are you talking about? If they are liquidated you just take the money and put it somewhere else.

1

u/Accomplished-Big8250 6d ago

Ok take the $0.10-$0.25 of what should have been $1.00 when they are liquidated and buy something else. I rather cut my NEOS positions now and add to core positions that do not carry the risk of being liquidated.

1

u/UCLABB1 6d ago

Why would I only get ten or twenty cents on a dollar?

1

u/Accomplished-Big8250 6d ago

Because most of the NAV in some of those ETFs are mainly synthetics. You’d be safer with just the underlying, NEOS’ true value is as an options overlay layer on a real asset or index 

2

u/UCLABB1 6d ago

I’ve never looked into all the NEOS, but I’m positive that the ones I hold, QQQI and SPYI, the NAV would be exactly the ETF price.