ETF Report: Macquarie-First Tr. Global Inf. Utilities Div. & Income Fund (MFD)

What this ETF is trying to do

The MFD ETF focuses on global infrastructure and utility companies. Its main goal is to provide both dividends (regular payments of money) and income to its investors.

What the numbers show

As of September 20, 2024, the current price of one share is $8.45. Looking back at the past year, the price has grown by about 14.81%. When you include the extra money paid out to investors, the "total return" for the last year was 27.26%.

To see how this works with a real amount of money, imagine you invested $10,000 one year ago when the estimated price was about $7.36 per share. Before any extra payments were added, your $10,000 would have grown to roughly $11,480 based on the price change alone.

Income and distribution explanation

This ETF pays out money to investors, which is called a "distribution." Over the last 12 months, it made four payments. The distribution yield is 9.4675%. This number tells you how much the fund pays out compared to its price. These payments usually happen every three months (quarterly).

It is important to remember that a high yield alone can be misleading. A very high percentage might look good, but it doesn't tell the whole story about whether the fund is healthy.

NAV erosion explanation

"NAV erosion" happens when the value of the underlying assets in the ETF drops over time. Think of it like a bucket with a small hole in the bottom; even if you keep pouring water (income) in, the level of the water (the share price) might still go down.

This fund has an "erosion score" of 75, which is labeled as "mild price erosion." This means there has been some slight downward pressure on the value, but it is not considered severe.

Pros

• The total return over the last year was quite high at 27.26%.

• It provides a steady stream of income through quarterly payments.

• The price has grown significantly over the last 12 months.

Cons

• Looking at a longer period, the three-year price return was -10.01%, meaning the share price dropped over that time.

• There is evidence of mild price erosion.

Beginner takeaway

Income investors usually prefer ETFs that stay steady or go up slightly in price. This is because if the share price collapses, you lose your original investment (your principal), which can cancel out the benefits of the extra income you received. While MFD has shown strong recent growth, the three-year history shows that prices can fluctuate significantly. Always look at both the income and the price changes together.