Glossary

A distributing ETF, also known as a dividend-paying ETF, is an exchange-traded fund that regularly distributes income generated from its underlying assets to its shareholders.

This income can come from dividends, interest, or other forms of cash flow produced by the assets held within the ETF. Distributing ETFs appeal to investors seeking regular income and cash flow from their investments. 💵

For example, a dividend-paying ETF that tracks a high-dividend stock index will distribute the dividends received from the stocks in that index to its shareholders.

Fun fact: Distributing ETFs can be an attractive option for income-focused investors, such as retirees, who may rely on the periodic income payments to cover their living expenses without having to sell their investments. 🧓💰