Reading an income ETF
These funds pay you cash every month or week. The only question that matters is what you had at the end compared with simply owning the index or the stock they write options on.
- The payout bar
- Two lanes on one scale. The top lane is cash paid to you over the window, always to the right of zero. The bottom lane is what the fund’s price did over the same window, to the left in clay when it fell. The solid line is the fund’s total return with cash reinvested; the hollow circle is the benchmark’s total return. The shaded gap between them is ahead in teal or behind in clay.
- Paid
- Every cash distribution in the window, added up, as a percent of the fund’s price at the start of the window.
- Price
- The change in the fund’s market price over the window. When a fund pays out more than it earns, this goes negative: the cash came out of principal.
- Total return
- Price change plus every distribution reinvested on the day it went ex-dividend. This is what you actually ended up with, and the only fair basis for comparing with an index.
- Benchmark
- The index or stock the fund writes options on: SPY for S&P 500 funds, QQQ for Nasdaq-100 funds, the stock itself for single-stock funds. Where the exact holdings have no listed twin, the nearest ETF is used and marked with an asterisk.
- Ahead or behind
- Total return minus benchmark total return, in percentage points. A fund can pay 12% a year and still be behind by 10 points if its price fell while the index rose.
- Payout rate
- The latest distribution multiplied by how many times a year the fund pays, divided by today’s price. It is a snapshot, not a forecast, and it says nothing about principal.
- Covered call
- The fund owns the stocks and sells call options on them, collecting premium and giving up gains above the strike. Synthetic covered call funds hold options instead of the stocks. 0DTE funds sell options that expire the same day.
- Where the cash came from
- With each distribution, an issuer that pays out more than its net investment income must estimate how much was income, realised gains, and return of capital (Rule 19a-1). ETFIQ shows the issuer's latest estimate on the fund card and in the Return of capital column, with the fiscal-year and trailing figures where the issuer publishes them. The estimate is on a book basis and changes at the year-end 1099. Option-income funds often show a high return of capital for tax reasons even when the price is stable, so read it next to the Price column, which measures whether principal actually shrank.
- Windows
- Three months, six months, one year, three years, and since the fund launched. Shorter windows react to the latest market; the launch window depends entirely on when the fund started. One year is the default because most of these funds are young.
Where to next
Definitions as ETFIQ uses them on the income desk. Every figure on the site is stated arithmetic on published data. Standards and sources