ETF Education Report: AADR

What this ETF is trying to do

The AdvisorShares Dorsey Wright ADR ETF (ticker: AADR) is an exchange-traded fund that focuses on American Depositary Receipts (ADRs). While the specific strategy is not detailed in the data, the fund holds a variety of international companies. Based on its Top Holdings, it includes companies from different sectors and countries, such as banking (BBVA and Mitsubishi UFJ) and technology (Taiwan Semiconductor).

What the numbers show

It is important to understand the difference between "price return" and "total return." Price return only tracks how much the share price changes. Total return includes both the price change and any cash distributions paid out to investors.

• Year-to-Date (YTD): The price return is approximately -6.07%, while the total return is approximately -5.11%.

• One-Year: The price return is approximately -4.27%, while the total return is approximately -3.17%.

• Three-Year: The price return is approximately 67.64%, while the total return is approximately 73.26%.

For a look at recent price movement, the current price is $81.02. The estimated price from roughly one year ago was approximately $84.63.

Income and distribution explanation

Some investors look for ETFs that pay out cash, known as distributions. AADR has a distribution yield of approximately 1.17%. This means the cash paid out is about 1.17% of the ETF's price. The fund usually pays these out quarterly, and it has made 4 payments over the last 12 months. It is important to remember that a high distribution yield does not guarantee an investor will earn that same amount as a total return.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases significantly. StockValueFinder uses an "erosion-risk score" to measure this risk. AADR has an erosion score of 94, which is labeled as "Stable / sideways," and the severity is rated as "good." There is no severe erosion-risk flag for this ETF.

Pros

• The fund has shown strong total returns over a three-year period (approximately 73.26%).

• The erosion-risk measurement is considered "good" and "stable."

Cons

• The fund has experienced a share-price decline recently, with negative price returns for both the year-to-date and one-year periods.

Beginner takeaway

When looking at AADR, it is helpful to distinguish between the share price and the total return. While the share price has gone down recently, the total return figure provides a fuller picture by including distributions. Always remember that looking at yield alone can be misleading, and it is important to monitor both price changes and the stability of the fund's value.