AUM

Assets Under Management — fund size in dollars. Larger AUM (>$100M) typically means tighter spreads, lower closure risk, and better institutional acceptance.

Inception Date

When the fund first traded. Funds with <3 years of history have limited cycle data — be cautious extrapolating yields/returns.

Avg Daily Volume

Average shares traded per day. Higher = better liquidity. Combine with bid/ask spread for a complete liquidity picture.

Investment Objective

What the fund is trying to achieve (income, growth, hedging, leverage). Pulled from the prospectus front page.

Index-Based

Y if the fund passively tracks a published index. N for active strategies that may use an index only as a benchmark.

Index / Benchmark Tracked

The actual index. For options-income ETFs, distinguish between equity exposure (e.g., S&P 500) and the comparison benchmark (e.g., BXM).

Management Style

Active = manager makes discretionary decisions. Passive = mechanically tracks an index. Hybrid = rules-based but with discretion.

Holdings Type

What's actually inside: Stocks, Bonds, Synthetic (swaps), Hybrid (stocks+options), Metals, Commodities, Crypto, Options-only, Fund-of-funds.

Leverage

Y if fund uses leverage (typically 2x or 3x). Leveraged/inverse funds reset daily — long-term returns ≠ leverage × index return due to volatility decay.

CC (Covered Call)

Sell call options against owned stock. Generates income but caps upside above strike.

CSP (Cash-Secured Put)

Sell puts while holding cash to cover assignment. Generates income; assigned if stock drops below strike.

CCS (Call Credit Spread)

Sell a call + buy a higher-strike call. Defined risk, lower premium than naked CC.

PCS (Put Credit Spread)

Sell a put + buy a lower-strike put. Bullish/neutral, defined risk.

Coverage %

Portion of the equity portfolio against which options are written. 100% = fully covered (full upside cap). 50% = half covered (more upside potential, less premium).

Expense Ratio (Net)

Annual fee charged by the fund. Subtract from gross returns. <0.20% is cheap (passive index); 0.30–0.70% is typical for active/options strategies; >1% is expensive.

Distribution Rate

Annualized payout as % of NAV. For options-income ETFs, this is often the headline number — but verify SUSTAINABILITY by checking ROC %.

30-Day SEC Yield

Standardized yield that reflects only interest/dividend income (excludes option premium and ROC). For CC ETFs, this is usually MUCH lower than the headline distribution rate.

Return of Capital (ROC)

A non-taxable distribution that reduces your cost basis. Common in CC ETFs. Not free money — when you sell, you'll pay capital gains on the lower basis.

Ordinary Income

Taxed at your marginal rate (up to 37% federal). Most bond ETF distributions and short-term option premium fall here.

Qualified Dividends

Taxed at LTCG rates (0/15/20%). Most domestic-equity ETF dividends are qualified.

Section 1256

SPX/index options and futures get 60% LTCG / 40% STCG treatment regardless of holding period — significant tax advantage in taxable accounts.

ROC-heavy

Distributions classified mostly as Return of Capital. Tax-deferred but reduces cost basis.

K-1 Partnership

Some commodity/MLP ETFs issue K-1s instead of 1099s — more complex tax filing.

NAV Erosion

Decline in net asset value over time. A red flag for high-yielders — if distributions exceed total return, NAV bleeds. Compare current NAV vs. inception NAV.

Tracking Error

Standard deviation of return differences vs. the benchmark. Important for index ETFs (<0.5% is good); less critical for active funds.

Max Drawdown

Largest peak-to-trough decline. Tells you the worst pain you'd have endured.

Sharpe Ratio

Return per unit of volatility. >1 is good; >2 is excellent. Higher = better risk-adjusted return.

Beta

Sensitivity to the underlying index: cov(fund, underlying)/var(underlying) over daily returns. 1.0 moves with it, <1 dampens, >1 amplifies. Covered-call income ETFs usually sit below 1 — written calls cap upside. Only shown when an underlying proxy is mapped.

Sortino Ratio

Like Sharpe, but divides excess return by DOWNSIDE deviation only — it ignores upside volatility, so a fund is not penalized for big up-days. Higher = better; >1 is good, >2 excellent. More relevant than Sharpe for asymmetric option-income payoffs.

Calmar Ratio

Annualized return (3-year when available, else 1-year) divided by the absolute max drawdown. Return earned per unit of worst-case pain. >0.5 is decent; >1 is strong. Rewards funds that grow without deep peak-to-trough declines.

Bid/Ask Spread

Cost to enter/exit. <0.05% is excellent; >0.20% is expensive. Most relevant for active traders or large positions.

Premium/Discount to NAV

How far market price strays from underlying value. Persistent large premiums/discounts signal liquidity or arb issues.

Counterparty Risk

Exposure if a swap counterparty fails. Common in synthetic and leveraged ETFs (TQQQ, etc.).

Path Dependency / Decay

Leveraged/inverse ETFs lose value in volatile sideways markets due to daily reset compounding. Hold long-term at your peril.

Currency / FX Risk

International ETFs without currency hedging carry FX exposure on top of equity exposure.

Verdict

BUY = adds to portfolio now. WATCH = monitor / wait for better entry or more data. PASS = doesn't fit your strategy.

Hold Period

Match strategy to time horizon. Leveraged ETFs = days to weeks. Income ETFs = years. Index ETFs = decades.

Section 1256 Contracts (§1256)

Certain regulated futures and broad-based stock-index options (e.g. SPX, NDX). Gains/losses are marked to market at year-end and taxed 60% long-term / 40% short-term regardless of holding period — a structural tax advantage for funds that write index options.

Covered Call (CC)

An options strategy where the fund sells (writes) call options against stock it owns. The premium received is income; in exchange the fund caps its upside above the strike price.

Put Credit Spread (PCS)

Selling a put and buying a lower-strike put on the same underlying. Collects net premium (income) with a defined maximum loss; profits if the underlying stays above the short strike.

Call Credit Spread (CCS)

Selling a call and buying a higher-strike call on the same underlying. Collects net premium with a defined maximum loss; profits if the underlying stays below the short strike.