ETF Report: Voya Asia Pacific High Dividend Equity Income Fund (IAE)

What this ETF is trying to do

The Voya Asia Pacific High Dividend Equity Income Fund, known by its ticker symbol IAE, is an ETF. This fund focuses on finding companies in the Asia Pacific region that pay out high dividends. A dividend is a small piece of a company's profit sent to its shareholders.

What the numbers show

Looking at the data, the current price of one share is $8.51. Over the last year, the price has grown by about 20.88%. When you include the dividends paid out, the total return for the year was 33.65%.

If you look at a longer timeframe, the three-year total return was 89.24%. This means that over three years, the value of the investment grew significantly through both price increases and dividend payments.

Income and distribution explanation

This ETF is designed for people who want regular cash payments. The distribution yield is 9.16%, which is quite high. Over the last 12 months, the fund paid out a total of $0.78 per share. These payments usually happen once a month, often on a Monday.

It is important to remember that a high yield alone can be misleading. A very high percentage might look good, but you must always look at whether the actual price of the ETF is staying healthy or falling.

NAV erosion explanation

"NAV erosion" happens when an ETF's share price drops significantly because it is paying out more money than it is actually earning. If a fund's price falls from a high number to a much lower number, it can destroy your principal. Your "principal" is the original money you put in. If you invest $10,000 and the price collapses, you might end up with much less than $10,000, even if you received dividend payments.

However, for this specific ETF, no price erosion was detected. The data shows a "good" erosion score, meaning the price has been growing rather than shrinking.

Pros

• The fund has shown strong total returns over one-year and three-year periods.

• It provides regular monthly income.

• The share price has been increasing rather than eroding.

Cons

• The fund focuses on a specific region (Asia Pacific), which means it may behave differently than funds that invest in the US or Europe.

Beginner takeaway

Income investors usually prefer ETFs that go sideways (stay at the same price) or move slightly up. They prefer this over ETFs that collapse in price. This is because if the price collapses, the loss of your original money might be bigger than the cash you get from dividends. In the case of IAE, the data shows the price has been moving up along with its distributions.