Roundhill Investments announced Thursday the launch of its latest exchange traded fund, which seeks to offer a monthly return of capital distributions to shareholders at an annualized rate of 20%, while providing exposure to the S&P 500.

The S&P 500 Target 20 Managed Distribution ETF (XPAY) is an actively managed fund that focuses on delivering 100% return of capital distributions. This approach can be advantageous for tax planning, as return of capital distributions are not subject to taxation in the year they are received, unlike capital gains or dividend income.

XPAY will come attached with a 0.49% expense ratio.

With regards to the launch, Dave Mazza, Chief Executive Officer at Roundhill Investments stated: "XPAY is designed and seeks to offer a steady tax-efficient distribution stream without sacrificing their exposure to the growth potential of U.S. equities."

"The fund seeks to provide a compelling alternative to traditional income-generating investments, allowing investors to potentially receive consistent tax-efficient monthly distributions while enjoying the benefits of equity market participation," Mazza added.

For investors interested in general S&P 500 tracking funds, here are some options: (SPY), (VOO), (IVV), (SSO), (RSP), (UPRO), (SH), (SDS), (SPXU), (FXAIX), (VFIAX), and (VFFSX).