ETF Report: Apollo Tactical Income Fund Inc (AIF)

What this ETF is trying to do

The Apollo Tactical Income Fund Inc, known by its ticker symbol AIF, is an ETF listed on the NYSE. This type of fund is designed to provide income to its investors through regular payments.

What the numbers show

As of July 22, 2024, the current price of one share is $14.82. Looking at how the price has changed over time, the one-year price return was 17.15%. When you include the money paid out to investors, the one-year total return was 32.47%.

The year-to-date (YTD) numbers also show growth. The YTD price return is 6.16%, while the YTD total return is 14.52%. This means the fund has grown in value and provided extra returns so far this year.

Income and distribution explanation

This ETF focuses on paying out money to its shareholders. Over the last 12 months, it made 12 distributions. These payments usually happen once a month. The total amount paid out over the last year was $1.7492 per share. This results in a distribution yield of 11.803%.

It is important to remember that a high yield alone can be misleading. A high percentage might look attractive, but it does not tell you the whole story about how the fund's price is performing.

NAV erosion explanation

"NAV erosion" happens when the value of the underlying assets in an ETF drops, causing the share price to fall over time. If an ETF's price collapses from a high amount to a much lower amount, it can destroy your principal. Your "principal" is the original money you put in. If you invest $10,000 and the price drops significantly, you could end up with much less than your original $10,000, even if you received some income payments.

In this case, AIF 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 shown a strong one-year total return of 32.47%.

• It provides regular monthly income.

• The price history shows the fund can grow in value alongside its distributions.

Cons

• The three-year price return was -3.20%, meaning the share price itself dropped over that long period.

• High-yield investments often come with different risks than standard funds.

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 keep their original investment safe while collecting payments. If an ETF's price collapses, the loss of your initial money might be larger than the income you earned. Always look at both the yield and the price history to see the full picture.