Real Wealth Is Built After Tax, Not Pre-Tax
For long-term investors, taxes can quietly erode returns over time. Most traditional S&P 500 ETFs deliver dividends on a quarterly basis, creating taxable events that compound year after year.
The Roundhill S&P 500(R) No Dividend Target ETF (XDIV) is designed to capture the growth of the S&P 500 without the drag of taxable distributions. By eliminating taxable dividend income, XDIV allows investors to defer taxes, keeping more money compounding over the long run.* This benefit is often referred to as “Tax Alpha”, the added value investors can achieve by minimizing or deferring taxes, which helps enhance after-tax returns compared to traditional investment approaches.
When modeled side-by-side with a traditional S&P 500 ETF, the difference is striking:
Over a 30-year holding period, an investor in XDIV ends up with a portfolio value 7.25% greater (0.26% annualized) than an investor in a traditional S&P 500 ETF, despite identical total returns before taxes. That’s the impact of avoiding dividend taxation and letting compounding work harder on your behalf.
Why XDIV Works for Long-Term Investors
XDIV is built for investors who care about what they actually keep and do not want the tax burden of distributions. It provides the full total return of the S&P 500 without quarterly dividend taxes. The benefits grow with time, making XDIV especially attractive for long-term investors in higher tax brackets. And with a net expense ratio of just 0.0849%, it remains a cost-effective solution.
The Bottom Line
Real wealth is built after tax, not pre-tax. For investors focused on compounding over decades regardless of their tax bracket, XDIV offers a more efficient way to own the S&P 500.
*XDIV is actively managed to minimize ETF distributions, which may result in superior after-tax returns for shareholders.
Disclosures
There is no guarantee that the Fund will be able to successfully avoid paying dividends and distributions. Additionally, there can be no guarantee that the Fund will be successful in its strategy to provide shareholders with a total return that matches that of the S&P 500® Index.
Investors should consider the investment objectives, risk, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information please call 1-855-561-5728 or visit the website at https:// www.roundhillinvestments.com/etf/XDIV. Read the prospectus or summary prospectus carefully before investing.
Investment Strategy Risk. There is no guarantee that the Fund will be able to successfully avoid paying dividends and distributions. Additionally, there can be no guarantee that the Fund will be successful in its strategy to provide shareholders with a total return that matches that of the S&P 500® Index. In order to effectuate the Fund’s strategy, the Adviser is relying upon the ability to conduct in-kind redemptions of the Fund’s S&P 500 ETF holdings. In the event that the Adviser is unable to do so due to factors such as broker-dealer balance sheet availability constraints, market volatility, regulatory changes, contrary IRS positions relating to an ETF’s use of in-kind creations or redemptions, or operational issues, the ability of the Adviser to avoid the taxable income generated by an investment in Fund Shares may be impaired and may force the Fund to make a dividend or distribution payment.
S&P 500 ETFs Risk. The Fund will have significant exposure to the S&P 500® Index through its investments in the S&P 500 ETFs. Accordingly, the Fund will subject to the risks of the S&P 500 ETFs, set forth below. In addition to these risks, each S&P 500 ETF is also subject to the following risks to which the Fund is also subject, which are described within the section entitled “Principal Risks”: Active Market Risk, Asset Class Risk, Concentration Risk, Cybersecurity Risk, Operational Risk and Structural ETF Risk.
Active Management Risk. The Fund is actively-managed and its performance reflects investment decisions that the Adviser and/or Sub-Adviser makes for the Fund. Such judgments about the Fund’s investments may prove to be incorrect.
Active Market Risk. Although Fund Shares are listed for trading on the Exchange, there can be no assurance that an active trading market for Fund Shares will develop or be maintained.
New Fund Risk. The Fund is a recently organized investment company with a limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decision.
Roundhill Financial Inc. serves as the investment advisor. The Funds are distributed by Foreside Fund Services, LLC which is not affiliated with Roundhill Financial Inc., U.S. Bank, or any of their affiliates.
Glossary
S&P 500 Index (S&P 500®): The S&P 500 Index is a measure of large-cap U.S. stock market performance. It is a float-adjusted, market capitalization-weighted index of 500 U.S. operating companies and real estate investment trusts selected through a process that factors in criteria such as liquidity, price, market capitalization, financial viability and public float. It is rebalanced quarterly in March, June, September and December.
