Glossary
Common terms used across CompareDividends.com’s ETF screener, comparison tool, and calculators.
Dividend Yield
Annual dividends per share divided by the current share price, expressed as a percentage. It shows how much cash income an investment generates relative to its price.
Indicated Yield
An annualized yield estimate based on the most recent dividend payment, projected forward as if that payment rate continued for a full year.
TTM Yield
Trailing Twelve Month yield: the sum of all dividends actually paid over the last 12 months, divided by the current price. Reflects realized income rather than a forward projection.
Expense Ratio
The annual fee an ETF charges its shareholders, expressed as a percentage of assets, covering fund management and operating costs.
NAV (Net Asset Value)
The per-share value of a fund's underlying assets minus liabilities. An ETF's market price can trade slightly above or below its NAV.
NAV Erosion
A decline in a fund's net asset value over time, often seen in high-yield option-income ETFs that pay out more in distributions than the underlying strategy generates in total return.
Covered Call
An options strategy where a fund holding a stock or index sells call options against that position to generate additional income, in exchange for capping potential upside.
Cash-Secured Put
An options strategy where an investor sells a put option while setting aside enough cash to buy the underlying asset if the option is exercised, generating premium income.
Total Return
The overall gain or loss from an investment, including both price appreciation and reinvested dividends, over a given period.
Dividend Reinvestment (DRIP)
Automatically using dividend payments to purchase additional shares of the same investment rather than taking the cash, compounding returns over time.
Distribution Frequency
How often a fund pays out dividends to shareholders — common schedules include monthly, quarterly, weekly, or annually.
BDC (Business Development Company)
A closed-end investment company that lends to and invests in small and mid-sized private businesses, typically distributing most of its income to shareholders.
REIT (Real Estate Investment Trust)
A company that owns or finances income-producing real estate and is required to distribute most of its taxable income to shareholders as dividends.
Margin
Money borrowed from a brokerage to purchase securities, using existing holdings as collateral. Amplifies both gains and losses.
Margin Call
A broker's demand for an investor to deposit more funds or securities when the account's equity falls below the required maintenance margin.
Maintenance Margin
The minimum percentage of equity an investor must maintain in a margin account to avoid a margin call.
Expense-Adjusted Return
A return figure that accounts for the fund's expense ratio, showing the net return an investor actually receives after fees.
Yield on Cost
A fund's current dividend divided by the investor's original purchase price, rather than the current market price — used to track income growth on a fixed initial investment.
Launch Date
The date an ETF began trading on an exchange.
Pay Period
The interval at which a fund distributes dividends to shareholders (e.g. Weekly, Monthly, Quarterly).