Roundhill says its AMD WeeklyPay ETF (AMDW) expects to make distributions each week but does not guarantee them, a qualification for investors relying on the fund for recurring cash payments.
The fund's website says its weekly payout formula takes account of the reference asset's performance and implied volatility, a measure of expected price swings. Roundhill says its distribution rate annualizes the latest payment against the fund's latest net asset value, and the rate is not total return.
The sponsor says distributions may exceed the fund's income and gains for its tax year, and amounts beyond accumulated earnings and profits may be treated as return of capital. Final tax treatment is reported to shareholders on Form 1099-DIV after the fiscal year ends.
