Hugh Lam

And so that can inflate that distribution yield.

So within that yield, yes, you have income or dividends from the stock, but incorporated in that typically around, you know, maybe financial year end, you might see some ETFs managed funds, you know, printing out 8%, 9% yields because a part of that is capital gains, which is not sustainable.

And again, that's not very tax effective for investors, too.

So there's a few reasons there.

But yeah, generally just don't follow the highest number is the lesson.

Sure.

There are six common types, I would say.

Three for equities or stocks and then three for fixed income, at least from our beta shares perspective.

So, within equities, you've got dividends.

So, the most common form of income investing directly from a share or a company.

We've explained that just then.

The other one is to do with call options.

So,

A call option, for those who may not know, it's just a type of, it's a financial instrument where a holder of a call has the option to buy a particular stock or security at a certain price in the future.

Sounds a bit complicated, but what these strategies do, called covered call strategies,

The ETF will sell call options.

When you're selling this instrument, you're getting a premium for selling that.

So a small amount of money comes back to the ETF in addition to also holding the underlying index, be it the ASX 200, S&P 500, et cetera.

So you're getting the, say for the ASX 200, we have a covered core strategy of the ASX 200, YMAX, Y-M-A-X.

The income profile from that is around sort of 7.5% to around 8% in terms of the yield.