PEPS vs TPAY

PEPSBParametric Equity Plus ETF

TPAYCRoundhill S&P 500 Target 10 Managed Distribution ETF

In short

PEPS Active management at index-fund pricing. PEPS holds a U.S. large-cap base, then writes S&P 500 calls against offsetting long exposure: a beta-neutral overlay built to add return rather than swap upside for income.

TPAY Most S&P 500 income funds pay out whatever the options market hands them. TPAY works backwards: set the number first (a 10% annualized distribution rate, paid monthly), then run the S&P 500 sleeve to fund it.

Stated mandate

PEPS The Fund seeks long-term capital appreciation. It is actively managed, using a U.S. large-cap equity base and beta-neutral call overwriting on the S&P 500 with offsetting long exposure to seek incremental total return.

TPAY The Fund seeks exposure to the return of the S&P 500® Index while pursuing tax-efficient monthly distributions.

Why people hold it

• PEPS 0.10% is index-fund pricing for an actively managed strategy. Even the cheap, well-regarded active peers cost more: DFAU at 0.12%, FELC at 0.18%.
• Not a covered-call fund. The sold S&P 500 calls are paired with offsetting long exposure, so the overlay seeks incremental total return instead of capping upside.
• Ordinary 1940 Act ETF wrapper, U.S. large-cap equity, distributions paid quarterly. The complexity lives in the overlay, not the tax paperwork.
• Cost is the standout: the typical active U.S. equity ETF in this group charges several times what PEPS does, and fee drag is the one input you know in advance.

• TPAY The payout is a stated formula, not a leftover: a 10% annualized distribution rate on a monthly schedule, written into the fund's own income policy.roundhillinvestments.com
• Fee of 0.49% a year, below the median for S&P 500 options-income funds.
• Actively managed around roughly 60 US positions rather than a fixed buy-write recipe, aiming at S&P 500 return plus tax-aware monthly cash.
• The tax angle is the point: the fund is built to make distributions tax-efficient, not just large.roundhillinvestments.com

Worth knowing

• PEPS Launched in November 2024. The overlay has not yet run through a full market cycle, so there is limited history to judge it on.
• A small, thinly traded fund. Bid-ask spreads can run wider than a mega-cap index ETF's, which shows up most on larger orders.
• The options leg adds moving parts: short index calls lose value in a sharp rally, and the offsetting long exposure is what has to make that back.

• TPAY A target rate is a payment schedule, not a return engine. When the portfolio earns less than it pays, the distribution comes partly out of the fund's own capital.
• The fund discloses that payouts can include return of capital, which trims your cost basis instead of arriving as income. Your year-end tax form is the real scorecard.
• A 2026 launch in a crowded cohort: small and thinly traded so far, which can mean wider bid-ask spreads than the category's giants.

Full PEPS profile⁠

Full TPAY profile⁠