ETF Report: Apollo Senior Floating Rate Fund Inc (AFT)

What this ETF is trying to do

The Apollo Senior Floating Rate Fund Inc (ticker: AFT) is an exchange-traded fund (ETF). This type of investment is designed to provide regular income to its investors. It focuses on "floating rate" assets, which means the interest it earns can change based on current market rates.

What the numbers show

As of July 22, 2024, the price of one share of AFT is $14.86. Looking at how the fund has performed, the numbers show growth in several areas:

• Year-to-Date (YTD) Total Return: 20.767%

• One-Year Total Return: 31.0063%

• Three-Year Total Return: 30.4325%

The "total return" includes both the change in the share price and the extra money paid out to investors. While the price of the fund has gone down by 2.8758% over the last three years, the total return remains positive because of the income it pays.

Income and distribution explanation

AFT is known for paying out regular distributions. Over the last 12 months, it made 12 payments, which means it usually pays investors every month. The "distribution yield" is 11.7046%. This number tells you how much income the fund paid relative to its price.

It is important to remember that a high yield alone can be misleading. A very high percentage might look attractive, but it does not tell you if the value of your original investment is staying safe or shrinking.

NAV erosion explanation

"NAV erosion" happens when an ETF pays out so much money that the actual value of the fund (the Net Asset Value) starts to drop significantly. If a fund's share price falls from a high number to a much lower number, it can destroy your "principal." Principal is the original amount of money you put in. If you invest $10,000 and the share price collapses, you might only have $7,000 left, even after receiving monthly payments.

However, AFT has an erosion score of 94, which is labeled as "Stable / sideways." This means it does not show signs of severe erosion.

Pros

• The fund has a high total return over the last year (31.0063%).

• It provides frequent income, usually on a monthly basis.

• The data shows the fund is currently stable rather than collapsing in price.

Cons

• The three-year price return is negative (-2.8758%), meaning the share price itself has dropped over that time.

• Investors must watch for high yields that might hide underlying price drops.

Beginner takeaway

Income investors usually prefer ETFs that go "sideways" (stay at a steady price) or move slightly up. They prefer this because they want to collect their monthly checks without losing the original money they invested. AFT is currently showing a stable pattern, but always remember that high yields require careful looking to ensure your principal stays safe.