Distributing ETF with Net Total Return index

According to S&P U.S. Indices Methodology:

S&P Dow Jones Indices calculates multiple return types which vary based on the treatment of regular cash dividends. The classification of regular cash dividends is determined by S&P Dow Jones Indices.

• Price Return (PR) versions are calculated without adjustments for regular cash dividends.
• Gross Total Return (TR) versions reinvest regular cash dividends at the close on the ex-date without consideration for withholding taxes.
• Net Total Return (NTR) versions, if available, reinvest regular cash dividends at the close on the ex-date after the deduction of applicable withholding taxes.

And your question is:

What does it mean then that the ETF has the distribution type of income treatment and the Net Total Return index type simultaneously?

From my understanding, this was what you expected to see:

• A distributing ETF tracks a Price Return index.
• An accumulating ETF tracks a Net Total Return index.

And so you got a bit confused when you saw a distributing ETF tracking a Net Total Return index.

However, distributions (dividends) are part of the return from an ETF. If you only look at the Price Return index, you will be understating your gains because you are ignoring the dividends you receive. That is why the benchmark is a Net Total Return index: it includes the effect of ETF price changes, while acknowledging that dividends are part of the return.