What this ETF is trying to do

The AllianceBernstein National Municipal Income Fund Inc (ticker: AFB) is an ETF traded on the NYSE. Based on its name, this fund focuses on providing income from municipal sources.

What the numbers show

When looking at an ETF, it is important to know the difference between "price return" and "total return."

• Price return only tracks how much the share price goes up or down.

• Total return tracks the share price change plus any cash distributions (dividends) you received.

For AFB, the one-year price return was approximately -12.89%. However, the one-year total return was approximately -7.91%. This shows that while the share price dropped significantly, the cash paid out to investors helped make the total loss a bit smaller.

Looking at different timeframes:

• Year-to-Date (YTD): The price return is about -12.57%, and the total return is about -8.41%.

• Three-Year: The price return was about 0.85%, but the total return was much higher at approximately 15.79%.

• Five-Year: The five-year total return was approximately -20.53%.

An estimated price from roughly one year ago was $10.86. The current price is $9.46. If you had invested $10,000 into the share price alone one year ago, that amount would have changed based on the -12.89% price return.

Income and distribution explanation

This ETF is designed to provide regular cash to investors. The distribution yield is approximately 6.37%. This means the fund paid out about $0.60 per share in trailing distributions over the last year. These payments usually happen once a month, with 12 payments made in the last 12 months.

It is important to remember that a high distribution yield does not guarantee you will earn that much as a total return. High cash payments can exist even if the share price is falling.

NAV erosion explanation

"NAV erosion" refers to a decline in the value of the underlying assets held by the fund. While a falling market price is not the same thing as NAV erosion, they are often related.

This ETF has an erosion-risk score of 75, which is labeled as "mild price erosion." This means there is a mild risk measurement regarding how the price and value have moved over time. There is no "severe erosion-risk flag" for this fund.

Pros

• Monthly Income: The fund typically pays out distributions every month.

• Three-Year Performance: The three-year total return has been positive at approximately 15.79%.

Cons

• Recent Price Declines: Both the year-to-date and one-year price returns have been negative.

• Long-Term Total Return: The five-year total return is approximately -20.53%.

• Erosion Risk: The fund has a "mild" erosion-risk score.

Beginner takeaway

When looking at AFB, it is helpful to look at both the share price and the total return. While the share price has declined recently, the monthly distributions provide cash income. However, investors should be aware that high yields do not protect against a falling share price or long-term losses in total value.