ETF Education Report: Apollo Tactical Income Fund Inc (AIF)

What this ETF is trying to do

Apollo Tactical Income Fund Inc (ticker: AIF) is an exchange-traded fund (ETF) traded on the NYSE. While the specific investment strategy is not detailed in the data, ETFs like this are often used by investors looking for regular income.

What the numbers show

It is important to understand that "price return" and "total return" are two different things. Price return only tracks how much the share price changes. Total return includes both the price change and the money paid out through distributions.

Here is what the data shows for AIF:

• Year-to-Date (YTD): The price return is approximately 6.16%. However, the YTD total return is higher at approximately 14.53%.

• One-Year: The one-year price return is approximately 17.15%. The one-year total return is much higher at approximately 32.47%.

• Three-Year: The three-year price return is approximately -3.20%, meaning the share price has dropped slightly over three years. However, the three-year total return is approximately 32.06%.

To visualize the one-year price change, we can look at an estimated price from roughly one year ago, which was approximately $12.65. The current price is $14.82.

Income and distribution explanation

This ETF has a distribution yield of approximately 11.80%. This number describes the cash distributions relative to the ETF's price. The fund has made 12 distributions over the last year, and they usually happen monthly.

It is important to remember that a high distribution yield does not mean an investor earned that exact percentage as their total return. Distributions provide cash income, but they do not guarantee that your original investment (your principal) will stay the same value.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. If an ETF's share price falls significantly, it can be a sign of this risk.

For AIF, the erosion-risk score is 94, which is labeled as "Stable / sideways." The erosion-severity is described as "good," and there is no severe erosion-risk flag present. This suggests the fund's price movement has not shown the type of extreme deterioration that triggers a severe warning.

Pros

• The fund has shown a strong one-year total return of approximately 32.47%.

• It provides regular monthly cash distributions.

Cons

• The three-year price return is negative (-3.20%), meaning the share price itself has declined over that period despite the total returns being positive.

Beginner takeaway

When looking at ETFs, always check both the price return and the total return. A fund might have a rising share price, or it might have a falling share price but still provide high total returns because of the cash distributions it pays out. High yields can be helpful for income, but they should always be viewed alongside how the share price is performing.