Member-only story
Is Return of Capital (ROC) Good or Bad?
| At first glance, some investors believe that Return of Capital in ETF dividend payouts is just your money being returned to you. Now, whether that is good or bad is more a factor of timing and, yes, taxes. Let me explain.
This past summer, I started investing in Option Strategy Income ETFs that sell options on reference assets and distribute that income to investors on a weekly or monthly basis. This strategy enables some jaw-dropping yields of 20, 50, and even 100%+ annual dividend yields. But in the ‘fine print’, there is something called Return of Capital. To the uninitiated, this can be a turn off, so let’s clarify what this really is and when it is good and when it is bad.
To learn more, come visit me at:
Author’s Disclosure and Disclaimer: The author may or may not hold positions mentioned in our blogs. This is not trade or financial advice and I am not a financial advisor, money manager, or tax advisor. This blog represents the opinion of the author and is for entertainment purposes. Also, this blog is in no way a recommendation to buy or sell any…
