Roundhill Launches S&P 500® Target 10 Managed Distribution ETF (TPAY)

Rhea-AI Summary

Roundhill (Cboe BZX: TPAY) launched the Roundhill S&P 500® Target 10 Managed Distribution ETF (TPAY) on Feb 18, 2026. The actively managed ETF provides targeted exposure to the S&P 500 while paying monthly return of capital distributions at an annualized rate of 10%. The fund aims to let investors remain invested in equities while receiving fixed, tax-efficient monthly payouts.

Positive

• Targeted S&P 500 exposure with active management
• Monthly distributions at a stated annualized rate of 10%
• Tax-efficient monthly payout structure per company disclosure

Negative

• Distributions are described as return of capital, which may affect cost basis
• Fixed 10% annualized payout may diverge from underlying S&P 500 returns

News Market Reaction – TPAY

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1 alert

% News Effect

On the day this news was published, TPAY declined NaN%, reflecting a moderate negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Target distribution rate: 10%

1 metrics

Target distribution rate 10% Annualized managed distribution rate stated for TPAY

Market Reality Check

Price: $48.97

normal vol

$48.97 Last Close

Market Pulse Summary

This announcement introduced TPAY as an actively managed ETF aiming to deliver monthly return-of-cap...

Analysis

This announcement introduced TPAY as an actively managed ETF aiming to deliver monthly return-of-capital distributions at an annualized rate of 10% while providing exposure to the S&P 500®. The news highlighted tax-efficient payouts and continued equity market exposure. Investors would typically watch future disclosures on how distributions are sourced, tracking relative to the index, expense levels, and any adjustments to the managed distribution policy.

Key Terms

return of capital, actively-managed ETF

2 terms

return of capital financial

"designed to pay monthly return of capital distributions to shareholders"

Return of capital is when an investor receives money from their investment that is not considered profit or earnings but rather a portion of the original amount they invested. It’s similar to getting back part of your initial savings rather than gains from it. This matters because it can affect how much money an investor still has in the investment and may have tax implications.

actively-managed ETF financial

"TPAY is an actively-managed ETF and allows investors to stay invested"

An actively-managed ETF is an investment fund you can buy and sell like a stock that is run by professional managers who pick and change the fund’s holdings instead of simply copying an index. Think of it as a chef composing a meal from fresh ingredients rather than reheating a prepackaged dinner: it can adapt to market opportunities and risks, offering a chance to outperform but usually carrying higher fees and manager-driven risk that investors should evaluate.

AI-generated analysis. Not financial advice.

TPAY offers targeted exposure to the return of the S&P 500^® Index while making monthly distribution payments equal to an annualized rate of ten percent (10%).

NEW YORK, Feb. 18, 2026 /PRNewswire/ -- Roundhill Investments, an ETF sponsor focused on innovative financial products, is pleased to announce today's launch of the Roundhill S&P 500® Target 10 Managed Distribution ETF TPAY (Cboe BZX: TPAY).

The Roundhill S&P 500^® Target 10 Managed Distribution ETF (TPAY) is designed to pay monthly return of capital distributions to shareholders at an annualized rate of ten percent, while providing exposure to the S&P 500^®.

TPAY is an actively-managed ETF and allows investors to stay invested in equity markets while receiving fixed tax efficient monthly payouts.

About Roundhill Investments

Founded in 2018, Roundhill Investments is an SEC-registered investment advisor focused on innovative exchange-traded funds. Roundhill's suite of ETFs offers unique and differentiated exposures across thematic equity, options income, and trading vehicles. Roundhill offers a depth of ETF knowledge and experience, as the team has collectively launched more than 100+ ETFs including several first-to-market products.

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/TPAY. Read the prospectus or summary prospectus carefully before investing.

Return of capital represents a return of a portion of a Fund shareholder's invested capital and is not taxable in the year it is received unless the distribution exceeds a shareholder's basis in the Fund. However, a return of capital may result in an increase in a later gain on a sale of Fund Shares or a reduction of a loss.

The strategy targets those investors who seek monthly income from their investment but wish to retain exposure to the return of the S&P 500® Index. Because a significant portion of the Fund's distributions will consist of return of capital, the Fund may not be an appropriate investment for investors who do not want their principal investment in the Fund to decrease over time or who do not wish to receive return of capital in a given period.

Market Risk. Market risk is the risk that a particular security, or shares of the Fund ("Fund Shares") in general, may fall in value. Securities are subject to market fluctuations caused by such factors as economic, political, regulatory or market developments, changes in interest rates and perceived trends in securities prices.

Distribution Tax Risk. The Fund currently expects to make distributions on a monthly basis. These distributions are expected and designed to exceed the Fund's income and gains for the Fund's taxable year. Distributions in excess of the Fund's current and accumulated earnings and profits will be treated as a return of capital. The Fund seeks to be managed such that the entirety of the Fund's distributions will be treated as a return of capital. A return of capital distribution generally will not be taxable but currently will reduce the shareholder's cost basis and will result in a higher capital gain or lower capital loss when those Fund Shares on which the distribution was received are sold. Once a Fund shareholder's cost basis is reduced to zero, further distributions will be treated as capital gain if the Fund shareholder holds Fund Shares as capital assets. Additionally, any capital returned through distributions will be distributed after payment of Fund fees and expenses. Because a significant portion of the Fund's distributions will consist of return of capital, the Fund may not be an appropriate investment for investors who do not want their principal investment in the Fund to decrease over time or who do not wish to receive return of capital in a given period.

Managed Payout Risk. The Fund intends to pay monthly distributions to shareholders based upon the NAV of the Fund on the final business day of December each calendar year. Distributions will be paid from Fund assets regardless of the Fund's performance or the level of dividends, income and capital gains earned by the Fund, and will reduce the amount of assets available for investment by the Fund. If distributions paid by the Fund exceed the Fund's earnings and profits, distributions of that excess will be treated as a return of capital to the extent of your tax basis in your Fund Shares.

The targeted annual distribution rate to be paid by the Fund each year is based on the NAV of the Fund on the final business day of December of the prior year. The targeted annual distribution rate is not guaranteed and may be decreased or increased in the future. The actual annual distribution rate paid by the Fund each month or year may be higher or lower than the targeted rate.

SPY ETF Risks. The Fund will have significant exposure to the S&P 500 Index and the SPY ETF through its investments in the SPY FLEX Options. Accordingly, the Fund will be subject to the risks of the SPY ETF.

FLEX Options Risk. Trading FLEX Options involves risks different from, or possibly greater than, the risks associated with investing directly in securities. The Fund may experience losses from specific FLEX Option positions and certain FLEX Option positions may expire worthless. The FLEX Options are listed on an exchange; however, no one can guarantee that a liquid secondary trading market will exist for the FLEX Options. In the event that trading in the FLEX Options is limited or absent, the value of the Fund's FLEX Options may decrease.

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.

Concentration Risk. The Fund may be susceptible to an increased risk of loss, including losses due to adverse events that affect the Fund's investments more than the market as a whole, to the extent that the Fund's investments are concentrated in the securities and/or other assets of a particular issuer or issuers, country, group of countries, region, market, industry, group of industries, sector, market segment or asset class.

Derivatives Risk. The use of derivative instruments (i.e. options contracts) involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include: (i) the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations; (ii) risk of mispricing or improper valuation; and (iii) the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset.

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.

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SOURCE Roundhill Investments

FAQ

What is the Roundhill TPAY ETF and when did TPAY launch?

TPAY is an actively managed ETF providing S&P 500 exposure with monthly payouts; it launched Feb 18, 2026. According to Roundhill, TPAY pays monthly return of capital distributions at an annualized 10% rate while maintaining equity exposure.

How does TPAY generate the monthly 10% annualized distributions?

TPAY pays monthly distributions characterized as return of capital rather than typical dividend income. According to Roundhill, the structure targets a 10% annualized payout while investors remain exposed to S&P 500 returns.

Is TPAY actively managed and what does that mean for TPAY investors?

Yes—TPAY is actively managed and can adjust holdings and strategy versus a passive index fund. According to Roundhill, active management aims to balance S&P 500 exposure with the fund's monthly distribution objective.

What tax treatment should investors expect for TPAY monthly distributions?

TPAY distributions are described as return of capital and may have different tax implications than dividends. According to Roundhill, the ETF intends these monthly payouts to be tax efficient, but investors should consult tax advisors.

How does TPAY affect an investor's exposure to the S&P 500 (symbol TPAY)?

TPAY provides targeted exposure to the S&P 500 while delivering fixed monthly payouts rather than pure index replication. According to Roundhill, the ETF maintains equity market exposure alongside its 10% distribution objective.